HomeCo moves into ECEC property ownership space with purchase of six centres

HomeCo, an Australian property group focussed on ownership, development and management has made its first move into the early childhood education and care (ECEC)sector with the purchase of six childcare centres. 

The portfolio consists of four stand alone centres in Sydney and Melbourne and two centres that are part of multi use facilities in Brisbane and the Gold Coast respectively. All centres are expected to be settled by March 2021 at a total cost of $131 million, with $62 million to be paid up front. The yield on investment is 5.6 per cent. 

HomeCo’s entry into the ECEC space marks a first for HomeCo, who were previously best known for taking over and repurposing the now defunct Masters’ large format hardware stores, and will see the addition of the centres take their Health, Wellness and Government Services portfolio value to over $400 million in size, paving the way for the launch of a new REIT, HealthCo, in 1H CY2021.

The transaction was financed by way of a placement of approximately 32.9 million new stapled securities of HomeCo (ASX: HMC)  at an issue price of $3.80, raising $125 million. 

“HomeCo has received strong demand from existing and new investors,”HomeCo Executive Chairman & CEO, David Di Pilla, said.

“The success of the placement indicates an ongoing endorsement for our ‘own, develop and manage’ strategy. The acquisitions will further strengthen HomeCo’s funds management platform and accelerate the establishment of a new health, wellness & government focussed REIT”.

To read the transaction presentation please click here.