We are pleased to present The Peak Childcare Trust, (“the Trust”) which will be the Holding Trust for three Childcare Centres - in Victoria, Queensland and Western Australia.
The properties have been purchased by Peak Childcare Holdings Pty Ltd (ACN 645 800 675) in its capacity as Trustee of the Peak Childcare Property Trust No 1. (“Trust No 1”). The Peak Childcare Trust owns all of the issued Units in Trust No 1.
This offering marks the establishment of the Peak Equities Childcare Division, with plans to accumulate a portfolio of strategically selected Childcare real estate assets over coming months.
The increasing importance of the Australian Childcare sector is well recognised. At the Federal Government level, we have clear bi-partisan recognition of Childcare as a central pillar of Australia’s Social Infrastructure.
Over recent months, in collaboration with leading Childcare consultants Navigator IC, Peak Equities has undertaken
detailed research into all aspects of the Australian Childcare industry. The result of our research has been the publication of a report, titled Childcare in Australia - A Guide to Investment, which can be downloaded by clicking here.
Based on our findings, we believe that the Australian Childcare industry is poised for continuing growth and expansion over the next decade, providing investors with the opportunity to enjoy stable, long-term income with realistic prospects for capital growth.
Each of the Childcare Centres satisfies the core criteria applied by Peak Equities in its selection and analysis process:
•Strategic location, supported by independent demographic reports;
•Long-termmarket-rate leases (typically 15+ years) with fixed annual rent increases; and
•Proven operators with an established record of success.
Recent market transactions in the childcare sector have reflected the growing awareness of the value of Childcare services. The February 2021 Burgess Rawson auction series achieved record prices, with the market valuing premium Childcare assets at yields below 5%.
In the opinion of the Trustee, each of the No 1 Trust’s assets has been well purchased, at an average yield of 5.96%. With moderate gearing, our forecasts provide for monthly cash income distributions commencing at the rate of 7% per annum, increasing progressively throughout the holding period to 8% per annum after 5 years.
Volatile economic conditions demand a strategic and well-informed approach to investment. Fixed interest rates are at record lows, and equities markets remain unpredictable, subject to sharp rises and falls. In these conditions, we consider that Childcare real estate investment provides an exceptional opportunity for Investors seeking a government supported, secure income stream that can be expected to extend through and beyond the current economic cycle.
In addition to income security, the Childcare Sector offers many additional attractions, which are detailed in the body of this Information Memorandum, together with full details of the properties acquired by the The Peak Childcare Property Trust No 1 and our financial forecasts.
We commend this investment for your consideration. Applications for investment must 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. We welcome your feedback, and in particular your likely interest in investing in future Childcare syndications.