An existing CQE childcare asset in Victoria. Source: CQE
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  • Charter Hall Social Infrastructure REIT (CQE) raises its FY22 projection as a result of a $58.4 million acquisition of healthcare and childcare facilities
  • The overall acquisition price of $58.4 million for the three assets represents a 4.4 per cent passing yield
  • FY22 forecast distribution guidance for CQE increases from 16.7 cents per unit (cpu) to 16.9 cpu, a 7.6 per cent increase from FY2
  • The group acquires a healthcare facility in Heidelberg, Victoria, leased to a fully owned subsidiary of ASX-listed Healius, and two childcare properties in Queensland
  • Shares in CQE are in the grey at $3.82 at 11:40 am AEDT

Charter Hall Social Infrastructure REIT (CQE) ups its FY22 guidance on the back of acquiring $58.4 million of healthcare and childcare properties.

A subsidiary of the David Di Pilla-led Home Consortium (HMC), CQE is the largest listed social infrastructure property fund in Australia.

The group has acquired a healthcare facility in Heidelberg, Victoria — leased to a fully owned subsidiary of ASX-listed Healius (HLS) — as well as two childcare assets in southeast Queensland.

The overall acquisition price of $58.4 million for the three assets represents a 4.4 per cent passing yield.

FY22 forecast distribution guidance for CQE has been increased from 16.7 cents per unit (cpu) to 16.9 cpu, a 7.6 per cent increase from FY21, based on current information and no unforeseen events.

The healthcare property is located at 456 Lower Heidelberg Road, Heidelberg, Victoria, and consists of a two-story structure with a net leasable area (NLA) of 3549 square metres on a large commercially-zoned corner site inside the Heidelberg Activity Centre, about 11 kilometres north-east of Melbourne.

The centre is leased to a wholly-owned subsidiary of Healius, one of Australia’s leading healthcare companies with a market capitalisation of around $3 billion.

The property houses administrative and support services such as passive pathology and storage for the adjacent laboratory, with the 9.5-year lease to Healius containing a set yearly rent increase of 2.75 per cent.

The deal will be completed on October 12, 2021. Stonebridge Property Group’s Justin Dowers successfully mediated the sale.

CQE also signed agreements to buy two existing premium childcare centres in southeast Queensland.

Following settlement, these centres will be leased on 15-year leases with guaranteed 3.25 per cent increments to a “well-regarded premium national operator”. The settlement is likely to take place in December 2021.

The deal was conducted off-market in collaboration with an existing CQE tenant client.

CQE will use available investment capacity, pushing CQE’s pro-forma gearing to about 27 per cent, with approximately $150 million in remaining investment capacity.

Fund manager Travis Butcher said the acquisitions are consistent with the group’s broader investment strategy.

“These acquisitions demonstrate the benefits of a broadened strategy which provides CQE with greater opportunities for investment in premium assets with strong property fundamentals,” he said.

“The addition of these assets results in CQE’s gross assets exceeding $1.6 billion and continuing to be the largest listed social infrastructure property fund in Australia.”

Shares in CQE are in the grey at $3.82 at 11:40 am AEDT.

CQE by the numbers
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