HealthCo REIT confirms acquisition of 13 newly built metro ECEC centres for $108m

HealthCo REIT confirms acquisition of 13 newly built metro ECEC centres for $108m

by Jason Roberts

October 19, 2021

HealthCo REIT, the recently launched healthcare and wellness property investment vehicle spun out of HomeCo, has confirmed that it has acquired thirteen newly constructed metropolitan childcare centres in a deal valued at $108 million. 


The centres, all of which are located predominantly in Victoria, were purchased in one line from developer Allaf Property Group who in July 2021 placed its 21 site portfolio for sale at an estimated value of $175 million. 


HealthCo has already taken ownership of one centre and expects to settle the balance between October 2021 and May 2022 as the developments complete with all centres already leased to well known operators such as Nido Early School, Explorers Early Learning, Story House Early Learning and Hilltop Childcare.


The group of thirteen centres was acquired at a 5.00 per cent yield with a WALE of 17.6 years and a mix of weighted average rent reviews (WARR) of 3.00 per cent and CPI cap and collared rental escalations. 


Acquisitions follow September HealthCo REIT IPO


This latest round of acquisitions is the first such transaction since the Initial Public Offering (IPO) of the REIT on the ASX in early September when HealthCo was effectively spun out of HomeCo, the Australian property group focussed on ownership, development and management. 


HealthCo was seeded with eight child care assets across Victoria, New South Wales and Queensland, with an estimated fair value in excess of $100 million representing around 21 per cent of HealthCo’s income at the time. 


Confirmation that HealthCo has acquired another thirteen centres since the IPO marks a significant statement of intent regarding the importance of the child care sector as a key component of their health and wellbeing asset acquisition strategy and underscore their ambitions in the sector.