Launch of Barwon Childcare Property Fund II
Barwon raised $20 million in equity for its second Childcare Property Fund – the Barwon Childcare Property Fund II (BCPF II). This Fund follows the successful investment of equity from our first childcare fund into three childcare development projects in Brisbane. The first fund is on track to achieve or exceed its target equity return of 15% IRR, net of fees and expenses, before tax. BCPF II will invest into 5 – 7 childcare development projects in metropolitan locations (inner city and growth corridors).
Key Fund Features
· Target return 15% p.a. (after fees and fund expenses, before tax)
· Capital Committed will be drawn down progressively
· Investment Period 3 Years, Fund Term 5 years
Why Invest in Childcare Property:
- Stable Income: The childcare property market is characterised by relatively stable income within Australia. Typically, the assets are less cyclical than traditional property sectors while providing attractive returns over the longer term.
- Long-term Leases: The childcare property market generally features long-term lease contracts to childcare operators of 10-20 years.
- High Occupancy Rates: Many childcare operators are seeing high occupancy rates within their centres. In recent times, for-profit operators report occupancy rate at approximately 85% in Australia.
- Childcare industry undergoing a transition: Traditionally, the ownership of the Australian child care sector, unlike other commercial real estate, has been fragmented. However, now we are seeing not-for-profit and for-profit centres being corporatised leading to increasing professional management and investment opportunities.
- Rise in demand in premium residential areas for higher quality childcare and early education services.