Australian Unity expands childcare property footprint to bridge growing demand gap
Located in key demand catchments, the two newly settled centres provide 222 childcare places and are in Epping, Victoria and Redwood Park, Adelaide.
The centres currently under contract will provide a further 369 childcare places and are in Athelstone in Adelaide, East Victoria Park, Perth, Sinnamon Park, Brisbane and Hervey Bay, Queensland.
On settlement, the four contracted centres will increase the Fund’s portfolio value to ~$73.5 million comprising a portfolio of 13 centres with more than 1,220 childcare places and a WALE of ~14.2 years.
Established in August 2021, the Fund has committed more than $70 million to growing and expanding access to quality childcare across Australia and continues to raise capital to grow its activity across the country.
Ryan Banting, Executive General Manager-Social Infrastructure, Australian Unity, said Australian Unity was pleased to be getting on with meaningfully investing in social infrastructure, including specialist disability accommodation and childcare property at a time when there is a groundswell of support from government and industry.
“Australia’s childcare property sector is an increasingly attractive investment proposition. There is a growing understanding of the pivotal role the sector plays in addressing Australia’s productivity challenges by helping more women return to work”, he said.
It’s forecast that by 2030 there will be 220,000 more pre-school children (0-4 year olds) and across the country there will be demand for an additional 3,000 childcare centres over the next decade to cope with the growth of two-working parent families, as more women look to enter or re-join the workforce.
“Greater demand for childcare services will result in increased demand for childcare property, he said.
“Australian Unity’s Childcare Property Fund was focused on working with high quality childcare operators to build new centres as well as support the expansion and improvement of existing centres to ensure they are high-quality, fit for purpose and able to manage future demand.
“For too long the market has neglected the ecosystems that enable the delivery of fit-for-purpose social infrastructure—be it childcare services, specialist disability accommodation, student accommodation, retirement living and aged care, or hospitals and medical centres.
“This infrastructure fosters community connections and provides critical social services. It’s not delivered in a vacuum, but in partnership with community organisations, businesses, schools, and universities.
“Established in 2016, our social infrastructure business is seeking to facilitate investment from the private sector in projects and initiatives that address Australia’s growing social infrastructure gap on the understanding that such investments deliver compelling returns while making a tangible difference to people’s wellbeing”, Mr Banting said.
The Childcare Property Fund’s forecast distribution yield for FY23 is 3.4% stabilising between 5 and 5.5% with a forecast portfolio internal rate of return range of 9-10% over the next ten years. Distributions are paid quarterly, with a limited liquidity facility available at the end of financial years 2025 and 2027.
Australian Unity is currently seeking to raise a further $25 million to support its acquisition pipeline and continued growth with a further $30.8 million in quality centres now in exclusive due diligence.
About the Australian Unity Childcare Property Fund
The Australian Unity Childcare Property Fund focuses on the delivery of stable secure income, capital growth and social impact via a long-term investment in childcare real estate. The portfolio is currently valued at more than $55 million and includes nine centres located in Queensland, Western Australia, South Australia, Victoria and Tasmania. Since inception in September 2021 the Fund has delivered a total return of 4.10%, with past performance not a reliable indicator of future performance.
About Australian Unity
Established in 1840, Australian Unity is a member-owned wellbeing company with 260,000 members and more than 700,000 customers. Our range of health, wealth and care products and services provides member, customer and community value that is supportive of personal and community wellbeing. www.australianunity.com.au
Units in the Australian Unity Childcare Property Fund are issued by Australian Unity Funds Management Limited (AUFM) ABN 60 071 497 115, AFSL 234454. AUFM is part of the Australian Unity Group of companies. This information is general information only and is not intended to be relied upon as financial product advice and does not take into account the objectives, financial situation, or needs of any particular investor. In deciding whether or not to acquire, hold or dispose of the product, investors should obtain a copy of the Information Memorandum (IM) and consider whether the product is appropriate to their particular circumstances and objectives. A copy of the relevant IM is available by calling our Investor Services team on 1300 997 774. Prior to investing in any financial product, an investor should consult with a financial and/or tax adviser. Investment is only available to investors who are ‘wholesale clients’ for the purposes of section 761G of the Corporations Act. Past performance is not a reliable indicator of future performance. Forecast returns are subject to internal and external risks and uncertainties that may have material effect on future business. Actual results may differ materially from any future results or performance expressed, predicted, or implied by the statements contained in this press release. As such, undue reliance should not be placed on any forward looking statement.