German asset manager Warburg-HIH Invest Real Estate has acquired another four day-nurseries under development in North Rhine-Westphalia for its childcare investment fund, which is targeting €100 mln and 20 assets in total.
Besides the acquisitions in North Rhine-Westphalia (NRW), two additional purchases are in an advanced planning stage, Warburg-HIH said. Together with the portfolio of nurseries in Saxony acquired six months ago, this will bring the total number of childcare facilities owned by the Warburg-HIH Zukunft Invest fund to 10, with a combined value of more than €45 mln.
The assets acquired in NRW are four daycare centres that are being built by developer Terra Projektentwicklung. The properties are located in Bochum (two assets), Duisburg and Oberhausen. Providing a total of 395 childcare spots, they are or will be occupied on 30-year terms leases by Step Kids Education, which operates a total of 25 day-nurseries in Germany. The facilities are scheduled for completion between the fourth quarter of 2021 and year-end 2022.
The properties in Saxony consist of two new-build and two existing buildings with a gross lettable area of 7,500 m2. One of these two new buildings will be completed by the end of this year, the other asset is scheduled for completion by the end of 2021. The properties are let on 25-year leases.
Hans-Joachim Lehmann, managing director at Warburg-HIH Invest, said: 'With the acquisition of eight day-nurseries within a six-month period and with negotiations under way to acquire another two assets, Warburg-HIH Invest achieved the necessary market penetration to ensure the continued growth of the investment fund, and has built up the know-how needed to manage them. What we aim for in this context is a partnership-like cooperation with professional developers.' Lehmann added that the positive experiences with the fund so far have already prompted the company to start devising another vehicle with a similar investment profile.
The Warburg-HIH Zukunft Invest fund is an open-ended special AIF targeting a cash-on-cash yield of 4.0 to 5.0% annually.
According to figures from the IW German Economic Institute in Cologne, the shortfall in child care spots in Germany adds up to nearly 320,000 nationwide. Among German states, NRW has the biggest shortfall in child care spots after Bremen.
'The demand for child care spots could hardly be stronger,' noted Alexander Eggert, managing director at Warburg-HIH Invest. 'The investment fund is primarily intended for savings banks. It offers long-term income and meets important ESG criteria. Environmentally friendly new buildings and a focus on training and educating children constitute an excellent basis for sustainable real estate investments in a positive market environment.'
