Peak Childcare Trust No. 3
Peak Equities has partnered with the experienced and proven Childcare Developer, TAL Group, to offer a portfolio of three childcare assets in Queensland and Western Australia. (For Wholesale Investors Only)
Investors are invited to apply for Ordinary Units in the PEAK CHILDCARE TRUST NO.3 (The Trust).
The total value of Ordinary Units to be allotted pursuant to this offering is $9 million (nine million dollars) in 9,000 Units of $1,000 each.
The Trust owns 100% of the unit capital in the Peak Childcare Property Trust No. 3 (Trust No. 3). Trust No. 3 will purchase the three properties and its principal activity upon completion of construction will be the derivation of rental income from each of the following Childcare centres:
• 7 Banks Creek Rd & 1470 Brisbane Valley Hwy, Fernvale QLD
• 2-4 Lago Crescent, Mt Sheridan QLD
• 642 Rockingham Road, Lake Coogee WA
Due Diligence - Peak Childcare Holdings Pty Ltd (Trustee of Trust No. 3) has undertaken and completed detailed Due Diligence investigations in relation to each of the Childcare Centres.
Application of Proceeds - The Trust will apply the proceeds of the capital raising to the purchase of Ordinary Units in the Peak Childcare Property Trust No 3, which will be the registered proprietor of the Childcare properties and the Lessor in each of the respective leases.
Purchase Price - The total funds required to purchase and develop the three freehold properties, including all acquisition costs and initial expenses is estimated to be $18,010,000
Funding - Peak Childcare Holdings Pty Ltd is in the process of finalising interest-only first mortgage funding from Bank SA at a 53% LVR, on a non-recourse basis to investors. The forecast variable interest rate will commence between 5.5% and 5.7% p.a. (based on the 90-day Swap rates at the date of preparing this IM).
Term of the Syndicate - It is expected that the properties will be held for a period of 5-8 years, subject to the discretion of the Trustee of Trust No. 3 to extend the holding period or to sell one or more of the properties at any time, if it considers that it is in the interest of Unitholders to do so. After satisfying any required bank debt reduction and all other obligations, the net proceeds of the sale of each or all the properties will be applied as a Return of Capital to Investors.
Liquidity - The Trustee undertakes that Investors in the Trust will be entitled to exit their investment at market value at any time after the 5th anniversary of the establishment of the Trust.
Forecast Distribution Rate - The Trustee proposes to make monthly cash income distributions to investors commencing at the rate of 7% per annum, subject to the satisfactory receipt of rental income, prevailing interest rates and the attainment of budgeted development profits. The forecasts have assumed average debt servicing costs of up to 5.5% per annum through the initial 6-year term of the Syndicate.
Disclaimer - Intending Investors should be aware of the risks associated with an investment in the Unlisted Property Trusts which are outlined in detail in the Information Memorandum.
Intending Investors are advised to seek independent advice before committing to an investment with Peak Equities.
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Fernvale - Journey
Fernvale is located approximately 37km West of Brisbane, in the Somerset region. This rapidly developing town currently faces a serious undersupply of childcare spaces, as compared to the QLD state average, thus this new state of the art centre is well positioned to succeed. Journey Early Learning expertly operates over 30 Childcare Centres across Australia. Their marketing material speaks of an “education approach that is inspiring and stimulating, filled with curiosity, wonder and joy and are committed to providing a safe, warm and inclusive environment where everyone feels welcome”.
| Address: | 7 Banks Creek Rd & 1470 Brisbane Valley Hwy FERNVALE QLD |
| Operator: | Journey Early Learning |
| Land Size: | 2782 sqm. |
| Gross Building Area: | 755 sqm. building + 820 sqm. outdoor play area |
| Licensed Childcare Places: | 100 |
| Commencing Rental: | $330,000 |
| Annual Rental Increases: | 3.25% - market review after 7 years |
| Rental per Childcare Place: | $3,300 |
| Purchase Yield: | 5.50% |
| Purchase Price: | $6,000,000 |
| Lease term: | 15 Years |
| Outgoings: | Tenant pays all outgoings including land tax |
Mt Sheridan - Eden Academy
Mt Sheridan is situated in the Cairns Regional Council local government area and lies 10kms south of Cairns CBD. This area is mainly residential, with a small percentage of commercial properties. Steady population growth is forecast for Mt Sheridan over the coming years, including pre-school age children in the catchment area of this childcare centre.
Eden Academy has been one of the recent success stories in the Childcare sector. The Group successfully operates over 20 Childcare Centres across Australia with several centres currently under development. Their reputation as a quality educator of pre-school age children has contributed to their operational and financial success in their existing Childcare assets.
The Eden Academy website describes the group’s focus on learning through play, valuing it as one of the main ways in which children learn and develop. They aim to nurture imagination and give a child a sense of adventure and through this, help them to learn essential social and educational skills such as problem-solving, working with others, and communication.
| Address: | 2–4 Lago Crescent MOUNT SHERIDAN QLD |
| Operator: | Eden Academy |
| Land Size: | 2340 sqm |
| Gross Building Area: | 611 sqm. building + 626 sqm. outdoor play area |
| Licensed Childcare Places: | 81 |
| Commencing Rental: | $275,400 |
| Annual Rental Increases: | 3.25%- market reviews after 7 years |
| Rental per Childcare Place: | $3,400 |
| Purchase Yield: | 5.51% |
| Purchase Price: | $5,000,000 |
| Lease term: | 15 Years |
| Outgoings: | Tenant pays all outgoings including land tax |
Lake Coogee - Tribe Early Learning
The Lake Coogee property will be the 4th Childcare Centre established by Tribe over recent years. Our purchase decision has been influenced by the considered and patient approach adopted by Tribe’s management team, establishing a firm footing based on proven educational programmes as they begin their expansion programme.
Tribe’s current Centres are all located in the greater Perth region, enabling them to closely observe and manage operational standards before they expand to regional or interstate areas.
Lake Coogee is located approximately 20.5km Southwest of Perth in the city of Cockburn, Lake Coogee is an industrial based area hosting significant minerals and resources operations, with a growing and relatively affluent worker population.
The average family income in Lake Coogee is above the WA average, with a high proportion of double income families.
| Address: | 642 Rockingham Road LAKE COOGEE WA |
| Operator: | Tribe Early Learning |
| Land Size: | 2170 sqm. |
| Gross Building Area: | 783 sqm. building + 717 sqm. outdoor play area |
| Licensed Childcare Places: | 100 |
| Commencing Rental: | $330,000 |
| Annual Rental Increases: | 3.5% with market reviews after 7 years |
| Rental per Childcare Place: | $3,300 |
| Purchase Yield: | 5.50% |
| Purchase Price: | $6,000,000 |
| Lease term: | 15 Years |
| Outgoings: | Tenant pays all outgoings including land tax |
Peak Equities Pty Ltd (AFS License 458013) is an experienced and proven Commercial Property Syndicator, with a proud track record of delivering strong financial returns and security for our clients. We source high yielding, well-located and well-tenanted commercial and industrial investment properties with sound growth potential.
The Peak Approach to Investors
We consider Property Management and tenant relationships to be as important as our acquisitions strategy. These factors influence the security of the income stream and the enhancement in value of each investment. With total assets under management valued at more than $275 million, we are presented with both off-market and publicly promoted opportunities on a daily basis.
Our investment criteria is transparent and diligently adhered to. We respect and appreciate the trust placed in us by our investors, and our committed team maintains regular and open communications with each of our investors.
Investment in Peak property syndicates is available exclusively to wholesale investors (as defined in section 761G or 761GA of the Corporation Act of 2001). Investment is open to high net worth individuals, companies, family trusts and self-managed superannuation funds.
We engage closely with our investors to ensure that their individual needs and expectations are satisfied throughout the investment term. From the moment of acquisition our interests are completely aligned with those of our clients.
The Peak Approach to Property
Security of income and capital is our primary concern. This creates the basis for capital growth and wealth creation over the term of the investment.
Investor returns are enhanced by borrowings undertaken by each investment trust. These are provided by major banks, on a strictly non-recourse basis. Peak investors have no liability to secured lenders, or for any obligations of the Trustee.
The Company will generally only pursue assets that are securely let. This not only provides a secure immediate investment yield, it also supports debt funding of the acquisition.
We budget on delivering an internal rate of return (IRR) exceeding 12%, and our performance or success fees will be related to that outcome. The value of selected investment assets will generally range upwards from $10 million with preference for assets around $50 million.
Under these parameters, we hope to deliver a strong yield to investors, enable debt funding and allow for capital growth.
Our strategy is firmly rooted in the acquisition of quality assets. To qualify for consideration as a Peak Property, each asset must exhibit all of the following attributes:
1. Desirable Location
2. High Yielding, Secure and Tax-Effective Income Streams
3. Genuine Capital Growth Prospects
An Economics and Finance graduate with 15 years experience in investment advice and private wealth management.
With a background in corporate and digital strategy, David has a proven track record of working with businesses and stakeholders to identify, develop and implement growth opportunities.
Over the past decade, David has grown Peak Equities Commercial Property Syndication business which now has over $275m of assets under management.
Mr. Trevor O’Hoy is the Chairman of Peak Equities Pty Ltd. Trevor is one of Australia’s most respected business leaders.
Trevor’s career culminated in his appointment as President and CEO of Fosters Group Ltd and Managing Director of Carlton & United Breweries.
Since his retirement in 2008, Trevor has held numerous non- executive board roles including the role Chairman of private companies and philanthropic Boards, including The Swisse Wellness Group; Redcape Hotel Group; the Fundraising Committee of Monash University; the Ponting Foundation Ltd; and the Tobin Brothers Foundation Ltd.
James is a highly reputed property professional with more than 20 years’ experience in property funds management. Beginning his career as a lawyer, James took up a position with the emerging Macquarie Bank property funds management business in 1996.
In his capacity as State Manager for Victoria South Australia and ACT, James headed a team that oversaw an investment and development portfolio of over $1 billion in value.
In his capacity as Acquisitions Advisor, James assists the Peak Directors in sourcing quality assets, and is charged with the responsibility of certifying all acquisitions as complying with the company’s baseline investment criteria.
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Commercial property syndication is a method of indirect investment into real estate. Individuals with limited funds contribute their investment into a pool which is used to acquire properties in a diversified portfolio. Each investor receives a share of the profits and capital depending on the number of units they have acquired in the pool.
A syndication deal is a method of pooling funds from various individuals and investing in real estate for the purposes of distributing profits to the unit holders. Syndicates allows individuals who cannot acquire properties outright, to make an investment that they are comfortable with.
Investing in commercial real estate allows you to invest your earnings or savings into an asset that will produce a modest rental and capital return. To maximise the returns, you will need to invest your time to find the right property, select appropriate tenants, draft well-designed agreements and make sure your investment is operating effectively.
A commercial investment is investing funds into commercial operations. This might include investing in commercial real estate where the tenants of the property are commercial enterprises. These investments differ to residential real estate investments because the leases are longer, the rents are higher, and the expenditures are low.
Unlisted property trusts are vehicles for the indirect investment in real estate. Like any investment it is wise to undertake due diligence to ensure that the investment is right for you. Consult a legal practitioner, financial adviser and taxation consultant to ensure you are fully briefed before making a commitment.
Anyone with capital over a stipulated threshold can invest. Some property syndicates include additional checks and measures to ensure that the funds received are proper.
Before purchasing commercial property, you will need to have the funds, consulted professionals and undertaken due diligence. There is no point in making an investment quickly and realising the income and capital returns are poor. Take time to survey the market, ask questions and make an informed decision.
The average return on commercial property differs depending on the property, the location, its history, the quality of the tenants, the economic conditions and other factors. Make sure that you understand the investment you are going to make, before making a commitment solely on the level of return.
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