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Charter Hall Group (Charter Hall or the Group) today announced that the Charter Hall Social Infrastructure REIT (CQE or the REIT) has acquired two childcare portfolios comprising 21 properties for a total purchase price of $134.3 million, reflecting a passing yield of 4.6%.
The portfolios strategically grow CQE’s footprint in the Western Australia and Melbourne markets. The acquisitions are in line with CQE’s strategy of providing investors with stable and secure income and capital growth through portfolio curation to secure high quality of tenants and leases within a diversified portfolio.
The Western Australia Bowman Group Childcare Portfolio comprises 18 quality operating childcare centres acquired off market, with 13 located within metropolitan Perth and the remaining five located regionally. With a current weighted average lease expiry (WALE) of 12.5 years, 100% of the rental income is underpinned by Australia’s two largest childcare operators, Goodstart Early Learning Limited and G8 Education Limited. This offers the REIT a strong national tenant covenant profile and deepens CQE’s existing relationship with major tenant customers.
The Melbourne Portfolio comprises three newly constructed, modern childcare centres in metropolitan Melbourne that were acquired on sale and leaseback agreements. The portfolio will be 100% leased to Nino Early Learning for an initial 20 years on a triple net lease structure, further expanding CQE’s relationship with Nino Early Learning and Charter Hall’s cross-sector relationship with the Agosta Family.
CQE Fund Manager, Travis Butcher, said, “We are pleased to add these quality childcare properties with strong fundamentals to the portfolio and build on our tenant customer relationship with these three operators. The addition of these assets will result in CQE’s gross assets exceeding $1.9 billion and continuing to be the largest listed social infrastructure property fund in Australia. Further, these acquisitions have enabled us to upgrade our FY22 forecast distribution guidance by 9.6% from FY21 to 17.2 cents per unit (cpu), which is a great result for our investor customers.”
Charter Hall Chief Investment Officer, Sean McMahon, said, “These strategic portfolios acquired by CQE were negotiated primarily off market and via a selective expression-of-interest process, and are representative of Charter Hall’s deep penetration in the real estate industry in Australia, with the Group’s funds under management now in excess of $61 billion. Charter Hall’s cross-sector approach enables us to leverage our relationships with cross-sector vendors, such as the Agosta Family, and purchasers to consistently deliver excellent outcomes for our investor customers.”
Since Charter Hall became the manager of CQE in 2018, the REIT has nearly doubled in scale from $1 billion to $1.9 billion and is the largest listed social infrastructure fund in Australia. CQE has broadened its social infrastructure investment mandate, providing the REIT with strong underlying ESG thematics and resilient growth opportunities.
The Western Australia Portfolio transaction was brokered by Ian Bowman, founder of Centreplace Capital and Daniel Steffe of Genera 45.
The Melbourne Portfolio transaction was brokered by CBRE’s Sandro Peluso, Jimmy Tat and Marcello Caspani-Muto.