LEARN MORE ABOUT THE POTENTIAL OF INVESTING WITH PEAK EQUITIES
- Location
Prospect, SA
Harris Crossing, QLD - Purchased
$17.47m
June 2022 - Expected Syndicate Term
8-10 Years
Monthly Cash Distribution: 6.5% p.a.
Key features of this asset:
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PEAK
CHILDCARE
TRUST NO. 2
June 2022
WHY PEOPLE CHOOSE PEAK EQUITIES
Two Premium Childcare Assets
20 Year Secure Leases
6.5% Income Paid Monthly
and Liquidity
Monthly Tax-
Effective Income
Distributions
Communication
and Information
Peace of
Mind
Expert Property
Selection and
Management
Opportunity
and Returns
2
INTRODUCTION
OFFER DETAILS
PEAK CHILDCARE TRUST NO. 2 -
CORPORATE STRUCTURE
BENEFITS OF INVESTMENT IN CHILDCARE
CURRENT MARKET TRENDS
PROPERTY & TENANT DETAILS
A. PAISLEY PARK CHILDCARE - PROSPECT,
ADELAIDE SA
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B. EDEN ACADEMY - HARRIS CROSSING,
TOWNSVILLE QLD
9
FINANCIAL SUMMARY
FUND THROUGH ARRANGEMENTS
MANAGER’S ENTITLEMENTS
PEAK PROFESSIONALS
RISK FACTORS
ADDITIONAL INFORMATION
APPLICATION FORM
SOPHISTICATED INVESTOR CERTIFICATION
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2
3
4
5
6
13
14
15
15
16
18
21
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Contents
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In March 2021, Peak Equities Pty Ltd (AFSL 458013) launched the Peak Childcare Trust, inviting investors to participate in
the dynamic Childcare sector of the Australian economy. In addition to receiving monthly income, Peak’s Childcare Trust
investors have enjoyed a substantial growth in the capital value of their investment during the first year of the Syndicate.
We are now pleased to offer participation in the Peak Childcare Trust No 2. (the Trust), which will be the ultimate holding
trust for two new Childcare Centres – one in the suburb of Prospect, Adelaide SA and the second at Harris Crossing,
Townsville, QLD.
The importance of the Australian Childcare sector is now well established, with bipartisan support at all levels of
Government, with the incoming Labor Government promising subsidies of up to 90%. In our view, the case has never
been stronger for investment in core social infrastructure assets with government-supported income and long-term
lease security.
Our acquisitions strategy is focused on new assets, reflecting “state of the art” advances in facilities design and curricu-
lum content. Following our extensive due diligence investigations, we consider that both of the properties acquired
satisfy three core criteria:
Strategic location, supported by independent demographic analysis;
Long-term market-rate leases – 20 years with fixed annual rent increases; and
Proven operators with an established record of success.
Paisley Park Early Learning Centre is a reputed operator and the tenant of the Prospect Childcare Centre. The Harris
Crossing Centre will be acquired as vacant land, with all licences, approvals, and contracts in place to construct a
130-place Childcare Centre. Prominent Childcare operator, Eden Academy, has signed a 20-year lease over the Harris
Crossing Centre, with rental commencing upon completion of the project around June 2023.
The construction of the Harris Crossing Centre will be financed under a “fund through” arrangement with Developer,
Griffith Group Pty Ltd. Under the fund through arrangement, we will receive monthly interest income from the Developer
enabling the Trust to pay distributions to investors at the nominated rate of 6.5% from commencement of the Syndicate.
A detailed explanation of the fund through structure is set out on page 14 of this Information Memorandum.
The Trustee is seeking to raise $9 million from investors with monthly income distributions commencing in July 2022, at
the rate of 6.5% p.a. Our forecasts have allowed for progressive increases in our cost of debt up to 3.9% p.a, while
maintaining sufficient cash reserves for contingencies and capital expenditure.
We commend this investment for your consideration. Applications for investment to be made on the application form at
the back page of this IM. Please approach any of our directors with any questions or requests for further information.
1
Introduction
David Borsky
Managing Director
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The Trust - Investors are invited to apply for Ordinary Units in the PEAK CHILDCARE TRUST NO.2 (Trustee, Peak
Equities Pty Ltd). The total value of the Ordinary Units to be allotted pursuant to this Offering is $9 million
(nine million dollars in 9,000 Units of $1,000 each).
The Peak Childcare Trust No. 2 (“the Trust”) owns 100% of the unit capital in the PEAK CHILDCARE PROPERTY
TRUST NO. 2 (“Trust No. 2”). Trust No. 2 will be the purchaser of the two properties and the principal activity will
be the derivation of rental income from these Childcare centres:
Due Diligence - Peak Childcare Holdings Pty Ltd, trustee of Trust No. 2 has undertaken and completed detailed
Due Diligence investigations in relation to each of the two Childcare Centres.
Application of Proceeds - The Trust will apply the proceeds of the capital raising to the purchase of Ordinary
Units in the Peak Childcare Property Trust No 2.
• 218 Main North Road, Prospect, Adelaide SA
• Lot 5000 Hogarth Drive, Harris Crossing Estate, Townsville
Purchase Price - The aggregate purchase price of the two properties is $18,171,750 (see details of each property
in the ‘Property & Tenant Details’ section)
Funding - Peak Childcare Holdings Pty Ltd has negotiated interest-only first mortgage funding from Bank SA at
a 52.5% LVR, on a non-recourse basis to investors. The forecast variable interest rate will commence between 2.75%
and 2.9% p.a. (based on 90 day Swap rates at the date of preparing this IM).
Term of the Syndicate - It is expected that the properties will be held for a period of 6-8 years. The Trustee of
Trust No. 2 has discretion to sell one or more of that trust’s properties at any time, if it considers that it is in the
interest of Unitholders to do so. After satisfying any required bank debt reduction and selling costs, the net
proceeds of the sale of the properties will be applied as a Return of Capital to Investors in the Trust.
Liquidity - The Trustee undertakes that Investors in the Trust will be entitled to exit their investment at market
value at any time after the 6th anniversary of the establishment of the Trust.
Forecast Distribution Rate - The Trustee proposes to make monthly cash income distributions to investors
commencing at the rate of 6.5% per annum.
Applications for Units - Each Investor may apply for between 100 and 750 Ordinary Units of $1,000 each in the
capital of the Trust (Investment Value $100,000 to $750,000). Applications may only be made on the Application
Form attached to this Information Memorandum.
1.
7.
9.
Offer Period - The offer will remain open until the full subscription has been received. The Trustee has complete
discretion as to the number of Units (if any) to be allocated to each Applicant.
10.
Management Agreement - The Trust has entered into a Management Agreement with Peak Childcare
Management Pty Ltd (the Manager).
11.
2.
3.
4.
5.
6.
Offer Details
8.
Offer Details - Cont
Peak Childcare Trust No.2 - Corporate Structure
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INVESTORS
PEAK CHILDCARE TRUST NO. 2
Owns 100% of Units in
Owner of Childcare Centres
Subscribe for Ordinary Unit in
PAISLEY PARK CHILDCARE
PROSPECT SA
EDEN ACADEMY CHILDCARE
HARRIS CROSSING QLD
Trustee - Peak Equities Pty Ltd
PEAK CHILDCARE PROPERTY TRUST NO. 2
Trustee - Peak Childcare Holdings Pty Ltd
Transfer of Investment Balance - Once the Trustee has confirmed the allocation of Units to an applicant, the full
subscription amount will be payable no later than Tuesday, June 28th, 2022. Unit Certificates will be issued by the
Trustee following settlement of the purchase.
12.
Offer Limited to Wholesale Investors - The Offer is available exclusively to Wholesale or Sophisticated Investors
as defined in the Corporations Act.
13.
Trust Documents - Prior to confirming their investment, intending Unitholders may request a copy of the Trust
Deed of the Peak Childcare Trust No. 2 or the Peak Childcare Property Trust No. 2, on a strictly confidential basis.
14.
Childcare in Australia is now widely recognised as a vital element of our Social Infrastructure.
The Childcare Sector is supported by record levels of Government funding, set to increase further from July
2023.
Stability of income over the longer-term, contrasting the volatility of equities markets and uncertainty of fixed
interest returns.
Long lease terms to proven tenants – commonly 20 years, plus options. Tenants pay all outgoings.
Leases generally include fixed annual rent increases - typically 3% per annum, with the tenant also responsible
for the payment of all operating expenses.
Tenants are subject to intensive government regulation and oversight, ensuring the premises are maintained
in a sound and safe condition.
Unlike most commercial real estate, Childcare property owners are not exposed to the payment of large
incentives to attract new tenants or extend existing leases.
Tenants make a substantial capital investment in the fit-out of the property and are responsible for mainte-
nance and upkeep.
Minimal capital expenditure obligations fall upon property owners.
Substantial depreciation allowances, particularly with new or near-new developments, flowing through as
tax-advantaged income to Investors
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Benefits of Investment in Childcare
The Australian Childcare market has sustained a strong compression of yields over recent years. As recently as two
years ago, quality metropolitan assets were selling at yields around 6.5%, with regional and rural properties selling at
yields above 7%.
The popular method of sale for individual assets has been by public auction. Leading agencies within the Childcare
sector, Burgess Rawson, Cushman & Wakefield, CBRE and JLL, conduct regular auctions throughout the year. The
format is attractive to high-net-worth individual investors, attracted by the long leases and values in the $5 to $10
million range, which has resulted in a highly competitive and often over-heated market.
Peak Equities does not participate in auction bids, as they are not suited to our patient and comprehensive due
diligence investigations. As such, we review opportunities arising from our network of developers and estate agents
specialising in the Childcare space. We look at off-the-plan purchases on a take-out basis upon completion, such as
the Prospect, Adelaide acquisition, or fund-through opportunities, as is the case with Eden Academy Centre in
Townsville.
Market yields vary according to location, principally reflecting the underlying land value. It is also evident that
investors will pay a premium for Centres operated by the larger, well-established operators. Investors have been
prepared to purchase at extremely tight yields in the suburban Sydney market, with Melbourne following close
behind. The trend of sharp yield contraction continued throughout 2021, and by year’s end, quality Childcare
properties in suburban Sydney and Melbourne were regularly selling at yields below 4%.
In anticipation of interest rate increases, we expected the market to soften in the new year, however the tight yields
held firm during the March and May 2022 auction series, notwithstanding that the May sales took place, after the first
increase in official interest rates.
The newly elected Labor Government campaigned on a platform including multi-billion increases in Childcare
subsidies. The maximum subsidy rate will increase to 90% for families for the first child in care, commencing in July
2023. Even families with household income of $150,000 p.a. will receive subsidies of 76%.
Demand for additional Childcare facilities is expected to continue, encouraged by the increased subsidies and
supported by record levels of female participation in the workforce.
The range and quality of activities at Early Learning Centres has advanced markedly over recent years. Empirical
evidence indicates a clear preference by families for newly built Centres, with the most progressive curriculum and
advanced physical facilities.
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Current Market Trends – June 2022
This unique Childcare Centre has been constructed
around a State Heritage horse tram barn, dating back to
1883. The single-story childcare centre comprises 6 main
playrooms as well as reception, office, kitchen and staff
amenities within a gross building area of 891sqm, with a
substantial outdoor play area. The Centre is licensed to
accommodate a maximum of 124 childcare places.
The building incorporates heritage features of the
former tram barn with modern design to produce an
architecturally pleasing structure which meets all current
early learning regulations.
Property & Tenant Details
A. Paisley Park Childcare - Prospect, Adelaide SA
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Address:
Operator:
Land Size:
Building Area:
Licensed Childcare Places:
Purchase Price:
Commencing Rental:
Rental per Childcare Place:
Lease term:
Outgoings:
218 Main North Road, Prospect, Adelaide SA Paisley Park
Early Learning Centre
2,994 sqm
891 sqm
124
$9,550,000
$477,400 p.a. plus GST with fixed 3% annual increases
$3,850
20 years plus a 10-year option
Tenant pays all outgoings including land tax
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Property & Tenant Details - Cont
The Operator
Paisley Park Early Learning Centres are a well-established and reputable childcare operator, with 19 centres including
Prospect under operation in NSW, Victoria and South Australia.
The principals of Paisley Park are Peter Raue and Katarzyna Wieczorek-Ghisso. Both have more than 15 years’
successful experience in the Childcare industry and are highly regarded within their profession.
Paisley Park has developed proprietary programs reflective of the now mandatory national Early Childhood
Curriculum (Early Years Learning Framework), focused on the building of a child’s wellbeing and supporting the
development of key educational milestones. Further information on the operator can be obtained via their website,
www.paisleypark.com.au
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Property & Tenant Details - Cont
Location and Demographics
The Prospect Paisley Park Early Learning Centre is located at 218 Main North Road, Prospect. The site benefits from
three street frontages including 78m of exposure to Main North Road, one of Adelaide’s most prominent roads with
47,000 daily passing vehicles connecting the CBD to the northern suburbs.
The suburb of Prospect, north of the Adelaide CBD, has a population of approximately 22,000 people (as at May 2021)
over an area of nearly 8 sq km. The population of children aged 0-4 years old make up approximately 6% of the
population. The Childcare demand ratio in Prospect is 2.3 0-5 year old’s per current long day care place.
The site’s highway positioning means it captures children from higher demand catchments further north of the property
as their parents drive past the site to/from work in the CBD. The site also benefits from right turn in/out access which is
rare along Main North Road. Demographics of the immediate catchment show Prospect has a SEIFA (Socio-Economic)
Index rating of 9/10 with 26% of population in the 18-34 age bracket.
Within the 1km radius from Paisley Park Prospect there are 2 public primary schools, being Prospect North Primary
(407 students) and Nailsworth Primary (624 students). There are two LDC Centres located on the periphery of the 1km
catchment and only one Centre in immediate proximity (1st Impressions Early Learning). The competitor is an
independently operated (single site) long day care, with an older, modest standard build over two levels. The Paisley
Park Prospect Centre is a modern single level design with a high level of specification and design.
Harris Crossing is a new master-planned community
approx.12km from the Townsville CBD, home to more
than 800 families (approx. 2,000 residents).
Harris Crossing adjoins the established Kalynda Chase
estate which commenced construction in 2005 and is
now fully developed. Kalynda Chase comprises
approximately 1,500 allotments and is home to
approximately 3,600 residents.
Property & Tenant Details
B. Eden Academy - Harris Crossing, Townsville QLD
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Artist impression
Artist impression
Address:
Operator:
Land Size:
Building Area:
Licensed Childcare Places:
Total Cost:
Commencing Rental:
Rental per Childcare Place:
Lease term:
Outgoings:
Lot 5000 Hogarth Drive, Harris Crossing Estate, Townsville.
Eden Academy
2,756 sqm Approx
877 sq.m. building plus 910 sq.m. outdoor play area
130
$7,920,000
$416,000 p.a. plus GST with fixed 3% annual increases
$3,200
20 years plus 2 x 10-year options
Tenant pays all outgoings including land tax
Property & Tenant Details - Cont
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Artist impression
Terms of Acquisition
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Property & Tenant Details - Cont
The Harris Crossing Childcare Centre will be developed over a period of approximately 12 months, with construction
having commenced in June 2022.
Peak Childcare Holdings Pty Ltd, as trustee for the Peak Childcare Property Trust No.2, has exercised an option to
purchase the land for a consideration of $1 million, which value was independently certified by Steven Frawley from the
JLL, Brisbane office.
Griffith Group Pty Ltd is the developer of the Harris Crossing Childcare. In that capacity, the developer has:
Location, Demographics & Demand
The local catchment comprises the Harris Crossing and Kalynda Chase estates in the suburb of Bohle Plains. Prior to the
commencement of project sales at Harris Crossing, Kalynda Chase has been fully developed. By 2026, the population of
the local catchment is forecast to reach 5,200 with approximately 550 children under 5 years of age.
The Harris Crossing Childcare site occupies a prime position in the fast-developing Harris Crossing subdivision and is
directly opposite Kalynda Chase Estate. These residential estates have a very high proportion of young families with
children under 5 years of age. At present there are no childcare centres in either estate (existing or in planning).
Parents need access to convenient and accessible childcare options in their local community. The proposed development
will deliver a much-needed local childcare option for residents of Harris Crossing and Kalynda Chase. This will be the only
childcare centre between Bohle Plains and Alice River -population of 6,650 people
Trust No. 2 has appointed Griffith Group Pty Ltd to act as Development Manager (DM), in which capacity the DM will be
responsible for all aspects of the development, to be delivered at a guaranteed fixed cost of $6,920,000. Any costs in
excess of that amount will be at the risk of the DM. This is a “Fund Through” structure, producing the same outcome as
if Trust No. 2 purchased the property on completion of construction. The financial benefit to Trust No. 2 of entering into
the fund through arrangement is estimated to exceed $800,000, arising from a combination stamp duty savings and
discounted purchase price.
We have has worked intensively with HWL Ebsworth, Brisbane Office, to undertake legal due diligence and to prepare
all documents and contracts required to protect the position of Trust No. 2 in this transaction. The firm has extensive
relevant experience and their work throughout the engagement has been of a high standard. We have the benefit of
valuable corporate and personal guarantees by the Griffith Group and its Managing Director.
Negotiated an Option Agreement to purchase the land for $1 million and assigned the rights under the Option
Agreement to Trust No. 2.
Undertaken all due diligence investigations to support the commercial viability of developing a Childcare Centre
on the site.
Negotiated a 20-year lease with established and well-reputed operator, Eden Academy, to commence upon
practical completion of the development.
Obtained all necessary authorities, permits and licences for the construction and operation of the Centre.
Entered into a fixed price building contract with Casa Building Group Pty Ltd (CBG) for the construction of the
improvements on the property.
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Property & Tenant Details - Cont
The female labour force participation rate in Bohle Plains (70.6%) is higher than the state average participation rate of
58%. Female labour force participation is closely correlated to long day care participation and suggests a high demand
for childcare in this market.
Key Parties
The security of the investment during the construction phase of the development will be underpinned by a
comprehensive suite of contracts and the appointment of independent professionals to oversee and manage the
construction of the property.
All permits, authorities and statutory approvals are now in place for the development of the Eden Academy Childcare
Centre at Harris Crossing. The construction phase will be overseen by the Griffith Group as Development Manager,
with overall responsibility for delivery of the project on time and on budget.
The key parties in the development are:
The Developer
The Griffith Group Pty Ltd is a proven and successful developer, with significant experience in the development and
sale of Childcare Centres within a portfolio of commercial projects valued in aggregate at more than $500 million.
We have been engaged in direct discussions with the Developer over a period of more than 3 months and have found
them to be honest and transparent in all our dealings, with a preparedness to negotiate reasonably as relevant matters
arose in the course of our negotiations.
We refer you to the Developer’s website www.griffithgroup.com.au/childcare. A Capabilities Statement is available
upon request.
The Operator
Eden Academy successfully operates some 19 Childcare Centres across Australia. Their experience in working with the
Griffith Group in previous Childcare developments is considered a significant benefit for the current development.
For more information, refer to the Eden Academy website at www.edenacademy.com.au
The Project Manager
The Developer has engaged an independent Project Manager to provide on-the-ground supervision of the construction
and to report on a weekly basis to the team leader within the Griffith Group.
Belo developments has more than 20 years’ experience in the construction industry, including project management of
four previous Childcare Centres prior to their engagement at Harris Crossing.
Quantity Surveyor
The Development Management Agreement between Trust No. 2 and Griffith Group provides for monthly progress
payments, supported by a detailed progress report reviewed and approved by an independent Quantity Surveyor.
The parties have agreed on the appointment of global QS firm, Ryder Levett Bucknall.
Financial Summary
Contract price - Adelaide 9,550,000
Acquisition Costs 76,000
Due Diligence - Adelaide 50,000
Contract Price - Townsville 7,920,000
Acquisition Costs 40,000
Due Diligence - Townsville 60,000
Total Cost Adelaide 9,676,000
Establishment Fees (2%) 353,920
Borrowing Costs 35,000
Cash Reserves 86,830
Total Cost Townsville 8,020,000
Net Rental Income Increases 3% p.a.
Income Distribution 6.5% p.a.
5 Year Capital Expenditure Allowance $25,000
Mortgage - 52.5% of combined contract price 9,171,750
Total Funds Required 18,171,750
Total Combined Cost 17,696,000
Investor Equity Required 9,000,000
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Fund through sale structures are an increasingly popular and effective way for new developments to take place, with
long-term investors accessing product ahead of the completion through structured acquisitions.
This type of structure can benefit both developers and investors by providing security of capital to a developer, while
giving the investor access to high-quality brand-new product at a reduced cost.
Childcare Centres are ideally suited to fund through arrangements, as they possess the following characteristics:
In the Harris Crossing fund through, Peak Childcare Holdings Pty Ltd will purchase the land for a consideration of one
million dollars, supported by independent valuation, and will provide construction finance to the developer, Griffith
Group Pty Ltd for a fixed cost of $6,920,000 to construct the Eden Academy Centre. The total price is capped at
$7,920,000, representing a yield of 5.25% in relation to the commencing income of $416,000 per annum.
The parties have entered into a Development Management Agreement for the delivery of the completed building.
The documentation supporting the fund through arrangement ensures that all construction and delivery risk remains
with the developer and that the purchaser is insulated against any cost increases.
A key feature of the arrangement is the payment of interest by the developer to Trust No. 2 in the form of a monthly
coupon payment. The coupon payment will return income on all monies contributed throughout construction,
including the land purchase price, and will enable the Trust to make monthly cash distributions at the prescribed rate
of 6.5% p.a. to Unitholders from the commencement of the project.
Additional significant benefits to the Investor include:
Key to engaging in a fund through arrangement is ensuring that the investor is protected from risk. The engagement of
an experienced and reputed legal firm is essential. Trust No. 2 engaged HWL Ebsworth, Brisbane office, who provided
us with quality advice and put in place a suite of documents required to mitigate any risk to Investors.
Finally, a pre-condition for engaging with the developer on fund through terms is a sound due diligence examination of
the capabilities of the key parties – the developer; the building contractor; the quantity surveyor approving all progress
claims for payment; and the long-term tenant company. After concluding our due diligence investigations, we are
satisfied with the various parties’ ability to deliver the completed product on time and on budget.
The land is “construction ready” with all permits, authorities and approvals in place.
The construction period is relatively short (usually less than 12 months).
There is a binding agreement for lease in place with a reputed and qualified operator.
A reduction in the purchase price of the property in compensation for enabling the developer to utilise its funds
for other projects. In this instance, the effective purchase yield will be 5.25%, compared to a market yield of
under 5%. This reduction in project cost reflects a benefit in excess of $400,000.
Stamp duties will be levied based on the purchase price of the vacant land rather than the contract price for a
completed centre. In this instance, the stamp duty savings reduce the cost by approximately $400,000.
Increased depreciation benefits through the acquisition of new product and associated plant and equipment.
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Fund Through Arrangements
Manager’s Entitlements
Category Description Entitlements
Establishment Fee
The Manager charges an initial fee calculated
as a percentage of the Acquisition Cost of the
investment properties, including stamp duties
and other statutory transaction costs.
2% of Acquisition Cost
Founder Units
Interests associated with the Manager have
been allotted 600 Founder Units at $1.00 each
in the capital of the Trust.
Founder Units are entitled
to 2% of the income and
capital of the Trust
Capital Gains
Interests associated with the Manager have been
allotted 600 Special CG (Capital gain) Units at
$1.00 each in the capital of the Trust.
Special CG Units will be
entitled in aggregate to 20%
of the aggregate returns of
the Trust in excess of an IRR
of 6.5% upon sale of the
Trust property.
Syndicate
Management Fees
Paid monthly to Peak Childcare Management
Pty Ltd for managing the assets and all of the
activities of the Trust No. 2 and the interests
of Unitholders. Calculated by reference to the
Total Asset Value of the Trust No. 2 at the
commencement of each financial year.
0.35% of the Total Asset
Value of Trust No. 2
(as defined in the
Trust Deed)
Selling Fee
Charged in respect of the sale of Trust No. 2’s
property (from which all external agents’ fees
and direct selling expenses will be paid)
Our team of property and financial professionals provide extensive industry experience and proven results.
2% of Sale Contract
Value
Peak Professionals
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DAVID BORSKY
MANAGING
DIRECTOR
TOM BORSKY
EXECUTIVE
CONSULTANT
JAMES WEAVER
DIRECTOR -
PROPERTY
TREVOR O’HOY
CHAIRMAN
IAN FOOTE
NON-EXECUTIVE
DIRECTOR
DAN MAGREE
VALUATIONS AND
ADVISORY
Intending Investors should be aware of the following
risks associated with an investment in the Trust and
are advised to seek independent advice before
committing to an investment in the Trust.
Whilst the revenue forecasts provided in this Information
Memorandum have been carefully formulated based on
current market conditions and reasonable assessment
of future conditions, unforeseen or uncontrollable
circumstances may arise during the term of the Trust
which adversely affect the projected income streams
and/or future capital values. There is no guarantee the
financial forecasts in this IM will be achieved. There are
a number of risk factors could impact on the projected
income, the tax effectiveness of any distributions, and
the return of capital or capital growth.
An investment of this nature carries a certain level of
commercial risk, and the performance of the Trust may
be affected by factors, many of which are outside the
control of the Manager. Some of the significant risks and
the way the Manager aims to manage those risks are set
out below. Please note the Manager cannot eliminate all
risks and cannot promise that the way it manages them
will always be successful.
Units in the Trust will be illiquid for a period of six years,
and during that time they may not be readily saleable.
The Manager has no obligation to purchase or redeem
Units during the first 6 years of the life of the Syndicate.
There is no established secondary market for Units and
transfers may only be affected in accordance with the
Trust Deed.
General Investment Risk
Liquidity Risk
In addition to contractual protections, several
professional appointments have been made, including
independent project managers and quantity surveyors
to oversee the timeliness, cost and quality of the
construction.
The Eden Academy Childcare Centre at Harris Crossing,
Townsville is due to commence construction in June
2022. All property construction is exposed to a number
of risk factors, which may be beyond the control of the
Trustee or the Manager. The manager has contractually
limited its financial exposure under a development
management agreement with the Developer, supported
by valuable corporate and personal guarantees.
Construction Risks
Property investment by its nature involves risk. The Trust will
be investing in the Trust No. 2, which will, in turn, invest in
Childcare freehold assets. The Manager cannot guarantee
the continuous occupancy of each property, nor the income
available for distribution to investors. Neither can the
Trustee or the Manager warrant that the eventual sale of the
property will generate capital gains to the investors.
Property Risks
Whilst the Covid-19 pandemic poses no present risk to
the operation of Childcare facilities, the various national
and global health authorities continue to classify
Covid-19 as a pandemic. A more serious outbreak of the
Covid-19 or other pandemics may affect the operation of
Childcare Centres in Australia. The leases with the
operators of the two Centres owned by Peak Childcare
Property Trust No 2 do not include pandemic rental relief
provisions in the absence of any government regulations
to that effect.
Covid and other Pandemic Risks
The Manager will insure all properties for full replacement
value and will insure against public liability claims up to $20
million. However, the circumstances of a particular loss or
the specific provisions of the insurance policy may preclude
a claim being accepted by the insurer. Additionally, there is
a risk that the insurance money received may not be
adequate to compensate the Trust.
Insurance Risks
The Manager does not guarantee the indicated earnings
and rate of distribution set out in this IM. Investors should
make their own reasonable enquiries and form an
independent opinion of the future performance of the
Trust. The forecast financial information has been derived
from financial models which have been developed by the
Manager.
Interest Rate and Forecasting Risks
Risk Factors
16
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There is a risk that the models may not be accurate
as a result of one or more incorrect assumptions.
Assumptions are generally only a best estimate at a
point in time. In addition to general forecasting risks,
there are likely to be increases in interest rates during
the term of the investment, which may increase the
cost of bank funding. The Manager’s forecasts have
provided for a succession of interest rate increases,
with the cost of debt increasing progressively during
the term of the investment The Trust will also hold cash
reserves to accommodate interest rate increases in
excess of the forecast amounts. If further funding
support is required, the Manager may defer part or all
its annual management fees. In the event of a
sustained increase in the cost of debt beyond the
forecast amounts, the Trustee may determine, as a
matter of prudence, to reduce the annual rate of
income distributions to unitholders.
The Peak Childcare Property Trust No.2 will partially
fund the purchase of the properties with debt. Mortgage
funding arrangements have been offered by Bank SA,
however there is no guarantee the debt funding will
ultimately be made available by the bank between the
date of this Information Memorandum and settlement of
the two properties. The Manager will be required to
meet various conditions before the funding can be
drawn down. If the debt funding is not provided the
Manager will need to seek an alternative lender and/ or
raise additional equity. Debt funding will be secured
against the real property, with no recourse to investors.
A default under the terms of the loan may lead to the
financier exercising its security and selling the property
or properties for a price lower than that which might
have been achieved in normal circumstances. This may
have a negative impact on the performance of the Trust
and potentially a loss of investors’ capital.
Borrowing Risks
Parents enrolling pre-school children in approved
premises are entitled to substantial government subsidies.
If those subsidies were to be materially reduced or
withdrawn, it would affect the affordability of Childcare
services and the financial viability of the operators. The
Trustee and the Manager consider that any reduction in
the level of government support in the near to medium-
term is unlikely in the present socio-political environment.
Governments have consistently increased Childcare
support in successive budgets, and the current Labor
government has undertaken to further increase support
after July 2023.
Continuing Government Support Risk
Risk Factors - Cont
17
18
The following is a summary of documents significant or
material to the Fund and its activities. This section only
contains a summary, which means that all the provisions
of each material document are not fully described.
Copies of material documents (subject to excluding
confidential commercial terms) may be requested from
Peak Equities Pty Ltd.
MATERIAL CONTRACTS
(a). Prospect
The contract for the acquisition of the Prospect centre
is nearing completion. It provides for a 5% deposit to
be paid by Peak Childcare Management Pty Ltd, upon
signing with settlement occurring 10 business days
after all matters relating to the completion of the
centre are achieved and the centre opening for
business. Settlement is expected to occur towards the
end of June 2022.
(b). Harris Crossing
The main agreements entered into by Trust No. 2
relating to the acquisition of the Harris Crossing
property are the nomination agreement and the
development agreement. Under the nomination
agreement, the developer agrees to nominate Trust
No. 2 as the buyer under its option agreement with
the current owner of the land. In accordance with the
option agreement, the nomination took place on 31st
May 2022, the option to acquire the land was exercised
at the same time and settlement of the land purchase
is now due to take place on 10 June 2022.
Following completion of the land purchase contract,
the developer will proceed with the construction of the
centre pursuant to a development agreement. The
development agreement provides for Trust No. 2 to
progressively fund the construction of the centre, with
a final payment due to the developer at the completion
date of the centre, which is expected to occur in June
2023. In consideration of Trust No. 2 agreeing to make
these progress payments, the developer is required to
make a monthly coupon payment to Trust No. 2, which
will be utilised by the Trust to pay monthly distributions
to investors until commencement of the lease.
1. Purchase Contracts
The Peak Childcare Trust No.2 was created on 26th May
2022, with Peak Equities Pty Ltd as trustee. The initial
unitholders of the Trust have been allotted Founder Units
and Special CG (Capital Gains) Units.
2. The Trust Deed
The Trustee has appointed Peak Childcare Management
Pty Ltd (PCM) to manage the affairs of Trust No. 2,
including the negotiation of purchase terms of the trust
property; the conduct of all due diligence activities;
day-to-day management of the property; attendance to
all Unitholder communications; trust accounting;
compliance with all statutory obligations and
requirements; and the eventual sale of the trust property.
Details of the Manager’s remuneration are set out in the
body of this Investment Memorandum. Details of the
Manager’s rights and responsibilities are set out in the
Management Deed dated 6th June 2022.
Copies of the Trust Deed and Management Deed
may be provided to Unitholders, subject to execution
of a non-disclosure agreement, upon receipt of a
written request.
3. Management Deed
Additional Information
19
Peak Childcare Management Pty Ltd in its capacity
as trustee of the Peak Childcare Management Trust
has been appointed as Manager of the Peak Childcare
Trust No 2, in which capacity it will also be responsible
for managing the affairs of the Peak Childcare Property
Trust No 2. Messrs David Borsky, James Weaver and
Tom Borsky are directors and shareholders of Peak
Childcare Management Pty Ltd.
Additional Information - Cont
Investors are made aware that parties associated
with Peak Equities Pty Ltd have financial, commercial
and other interests in the various entities associated
with the establishment and operation of the Peak
Childcare Trust No 2.
DISCLOSURE OF INTERESTS
Peak Equities Pty Ltd
Messrs David Borsky, James Weaver, Trevor O’Hoy and
Ian Foote are directors of Peak Equities Pty Ltd, and
entities associated with each director are shareholders
in the company. Interests associated with Mr Tom
Borsky are shareholders in Peak Equities Pty Ltd.
Mr Dan Magree is a member of the Peak Equities Pty
Ltd Advisory Board and is a Responsible Officer
pursuant to the Peak Equities Pty Ltd AFS Licence.
Interests associated with Mr Dan Magree receive
consulting fees from Peak Equities Management Pty
Ltd, a company associated with Peak Equities Pty Ltd.
Peak Childcare Trust No.2
Interests associated with Messrs David Borsky, James
Weaver, Trevor O’Hoy, Ian Foote and Tom Borsky are
the holders of Founder Units and Special CG Units in
the capital of the Peak Childcare Trust No. 2, together
with one unrelated party.
Peak Childcare Holdings Pty Ltd in its capacity as
trustee of the Peak Childcare Property Trust No 2
is the registered proprietor of the Childcare property
assets at Prospect and Harris Crossing. Messrs David
Borsky, James Weaver and Tom Borsky are directors of
Peak Childcare Holdings Pty Ltd.
Peak Equities Pty Ltd is the trustee of the Peak
Childcare Trust No 2, in which capacity it owns 100% of
the Units in the Peak Childcare Property Trust No 2.
Peak Equities Pty Ltd also owns 100% of the issued
capital of Peak Childcare Holdings Pty Ltd.
The abovenamed parties who have an interest in Peak
Equities Pty Ltd and the Peak Childcare Trust No 2 are
thus indirectly interested in Peak Childcare Holdings Pty
Ltd and the Peak Childcare Property Trust No 2.
The Anti-Money Laundering and Counter-Terrorism
Financing Act 2006 (AML/CTF) requires entities such as
Peak Equities Pty Ltd to maintain a program that
identifies, mitigates and manages money laundering
and terrorism-financing risks associated with its business.
In this regard, the Trustee may require investors to
provide additional information for identification and
verification purposes. Please note that the Trustee may
not accept an Application to invest in the Fund until it is
satisfied that the identity of the Investor has been
verified in accordance with the requirements of the
AML/CTF.
If you do not provide a completed Application Form,
this may delay the processing of your Application or
result in your Application being declined.
ANTI-MONEY LAUNDERING AND
COUNTER-TERRORISM FINANCING
Peak Equities Pty Ltd is committed to the protection of
your personal information in accordance with the Australian
Privacy Principles set out in the Privacy Act 1988.
All personal information held by Peak Equities will be
governed by Peak’s most recent Privacy Policy. This Privacy
Policy applies to the collection, use and disclosure of
personal information. Peak collects your personal
information for the purpose of providing its property
acquisition and funds management services. The
information will not be made available to third parties other
than required by our privacy policy and applicable law and
to service providers necessary for us to conduct our
business activities. If we cannot collect personal information
from you, we may not be able to perform the activities
listed above.
PRIVACY PROVISIONS
20
Additional Information - Cont
The personal information collected from you on the
Application Form is used to evaluate your Application for
Units in this Trust as well as to issue Units, service your
needs as a Unitholder and administer the Trust. This
includes information that Peak Equities Pty Ltd must pass
on to Peak Childcare Management Pty Ltd, and other
service providers. The personal information you provide is
kept for record keeping purposes. If you do not provide
the necessary personal information, your Application may
not be processed. Once personal information is no longer
needed for the Fund and Peak’s records, it is destroyed or
de-identified. Your personal information may be disclosed
overseas.
Unitholders have a right to access the information about
them held by Peak and to correct any errors as set out in
our Privacy Policy. Please advise us of any information that
appears inaccurate or incomplete (especially your address
and correct investing entity name).
You can call Peak on +61 (03) 9863 8380 or write to Peak
at the address listed below to access the information held
about you by Peak. If you have any complaint in relation to
the manner in which your information has been handled,
please contact us.
As well as reporting to you on your investment, Peak or
PCM may use your contact details to forward newsletters
and to let you know about future investment opportunities
offered by Peak.
If you prefer not to receive these communications, please
telephone or write to Peak.
If obliged to do so by law, Peak will pass on your personal
information to other parties such as the Australian Taxation
Office and other regulatory bodies, strictly in accordance
with legal requirements.
Peak Equities Pty Ltd seeks to resolve potential and actual
complaints over the management of the Trust to the
satisfaction of Unitholders. If a Unitholder wishes to discuss
any aspect of the management of the Trust or wishes to
lodge a formal complaint, they may do so in writing, by
email or by telephone at:
Peak Equities Pty Ltd
Suite 1438, 1 Queens Road
Melbourne VIC 3004
Telephone: 03 9863 8380
Email: info@peakequities.com.au
The company will promptly acknowledge any complaint
received from a Unitholder, investigate it, and decide in a
timely manner any action that needs to be taken.
COMPLAINTS AND CONTACTING US
20 ABN 21 165 827 574. Holder of AFS Licence 458013
Application for Units
Peak Childcare Trust No. 2
I/We
(full name of unit holding entity, both Trustee and Trust, if applicable)
TFN: ABN/ACN
(of unit holding entity/ies)
Of
(insert mailing address)
Email Address Mobile number
Hereby apply to invest the amount of $ ______________in______________ Ordinary Units of $1,000 each,
in the capital of the Peak Childcare Trust No. 2, constituted by deed dated 26th May 2022.
Account Name:
BSB:
Account Number:
Reference:
Peak Childcare Management Pty Ltd
063 010
1466 8713
Investor Surname
Transfer of investment funds
Once the Trustee has confirmed the allocation of Units to an applicant, the full subscription amount must be received
as clear funds, no later than Tuesday 28th June 2022 into the following account:
Investor Bank account details for income distributions
Account Name: ___________________
Account number:__________________
BSB: _____________________________
I/we agree that, upon the units being allotted, I/we shall be bound by the terms and conditions of the Trust Deed.
Signed by/on behalf of the Applicant by
Signature Capacity
(e.g. Director or Trustee)
Date
Once completed, this form can be submitted it via email or post.
Address: Peak Equities - Suite 1438, 1 Queens Road, Melbourne, VIC, 3004
Email: info@peakequities.com.au
Phone: 03 9863 8380
21
to be submitted with application by all new investors
Name and Address of Investing Entity
Sophisticated
Investor Certification
I certify that the following is true and correct in every particular:
1”Qualifed accountant” means a member of a professional body that is approved by ASIC in writing for the purpose of the definition.
ASIC has indicated that it will approve any member of:
a. The Australian Society of Certifed Practicing Accountants (“ASPCA”), who is entitled to use the post-nominals “CPA” or “FCPA”,
and is subject to and complies with the ICAA’s continuing professional development requirements;
b. The Institute of Chartered Accountants in Australia (“the ICAA”), who is entitled to use the post-nominals of “CA”, “ACA” or “FCA”,
and is subject to and complies with the ICAA’s continuing professional education requirements; or
c. The National Institute of Accountants (“the NIA”), who is entitled to use the post-nominals “MNIA” or “FNIA”, and it subject to and
complies with NIA’s continuing professional education requirements.
Name of Qualifed Accountant
Name and member number of professional body
Signature Date
a. I am a qualifed accountant within the meaning of section 9 of the Corporation Law1
b. This certificate is given at the request of the investor named above (“Investor”) in relation to potential offers by
Peak Equities Pty Ltd to subscribe for or acquire securities.
c. This certificate is given to Peak Equities Pty Ltd for the purpose of section 708(8)(c) of the Corporations Law; and
d. The Investor has:
(i) Net assets of at least $2,500,000; or
(ii) A gross income for each of the last 2 financial years of at least $250,000 a year.
Once completed, this form can be submitted it via email or post.
Address: Peak Equities - Suite 1438, 1 Queens Road, Melbourne, VIC, 3004
Email: info@peakequities.com.au
Phone: 03 9863 8380
ABN 21 165 827 574. Holder of AFS Licence 458013
22
Peak Equities Pty Ltd
info@peakequities.com.au | www.peakequities.com.au
ABN 21 165 827 574. Holder of AFS Licence 458013
- RETURN TO PORTFOLIO
GRAND JUNCTION UNIT TRUST
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