HealthCo Offloads Victoria’s Largest Childcare Centre

As activity ramps up in the childcare sector on the back of increasing costs and demand, the biggest centre in Victoria had changed hands.

HMC Capital’s HealthCo Health and Wellness REIT sold the childcare centre at 117 Kooyong Road, Armadale for $20.5 million to an unnamed buyer.

CBRE’s Australian Healthcare and Social Infrastructure team’s Sandra Peluso, Jimmy Tat, and Marcello Caspani-Muto handled the sale.

The centre is Victoria’s largest with a site area of 4328sq m, according to Corelogic’s property records.  It is currently tenanted by Explorers Early Learning.

The sale comes as the REIT divests around $45.3 million in childcare assets with a passing yield of 4.8 per cent.

The REIT announced in April this year that it was acquiring the Healthscope Hospital Portfolio in tranches with Brookfield’s HealthCo committing to long term leases for 11 of the properties in the transaction.

Tranche 1 and 2 were settled for $730 million in May 2023 and the third tranche is sxpected to settle about September for another $470 million.

HMC Capital announced it would recycle assets and undertake capital raising to fund the purchase. 

It expects to raise around $325 million for the final tranche.

▲ HMC Capital is on track to hit its $10-billion assets under management target after acquiring eleven properties under lease to Brookfield's Healthscope.

Demand and interest in social infrastructure assets is soaring with HMC Capital keen to focus on healthcare and hospitals specifically.

Tat said CBRE had seen an increasing trend for overseas investors to buy up social infrastructure assets.

“While domestic interest has remained strong, our teams’ last six months of childcare and social infrastructure-related investments has seen circa 70 per cent of properties sold to international capital,” Tat said.

“Australia’s immigration numbers are also acting as a fundamental driver for investors. 

“With increasing immigration rates and forecast interest rates reductions in 2024 there will be a major uplift in demand with limited supply already choking the markets.”