$98m childcare deal sealed as centres dubbed ‘the new bank’

An almost $100m Australian mega-deal for 12 childcare centres, all but one in Melbourne, has been struck as early learning real estate has been branded “the new bank”.

It comes as another super-sized childcare portfolio is expected to top $30m by November.

The $98m sale brokered between HealthCo Healthcare & Wellness REIT (real estate investment trust) and developer Allaf Property was announced yesterday as one of the largest in recent history.

But it accounts for less than half of the more than $200m in property acquisitions announced by the investment group across Melbourne, Sydney and Perth.

Childcare operators include Nido Early School, Explorers Early Learning, Story House Early Learning and Hilltop Childcare.

The deal was brokered by commercial real estate agencies CBRE, Burgess Rawson and Savills.

CBRE healthcare and social infrastructure Sandro Peluso said there had been “unwavering demand” from investors throughout the economic uncertainty of the pandemic.

His comment follows the listing of another $30m in childcare centres by the Nino Early Learning Adventure group who have already sold $200m worth of the centres across Melbourne, and more than $115m since 2017.

The latest listings include a Mickleham centre opened at 2 Whiteleaf Drive this week, one at 162 Elevation Boulevard, Craigieburn, and another at 27 Livingston St, Ivanhoe, expected to be finished late in 2022.

“Childcare centres have become the new bank; Covid- and recessionary-proof in terms of avoiding disruption, heavily subsidised by the Commonwealth and featuring long leases with built-in increases,” Mr Peluso said.

One of Victoria’s biggest leaseback childcare operators, the Nino group co-owner Luke Agosta is understood to be behind their rapid expansion.

Their model typically has them build a sites, sign on for the lease, then sell the property to investors in order to fund new centres.