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Orchard Childcare Property Fund

Due to the continuing extreme volatility in global financial markets this product has been placed on hold.
Orchard Childcare Property Fund
Rebate 3.00% as additional units
Minimum Investment $10,000
Investment Term Open-ended
Research Lonsec Highly Recommended

The Fund provides exposure to more than 200 purpose-built, fully-tenanted properties, including 30 new centres under development. The Fund has a broad geographic exposure across Australia, with the portfolio of properties generally leased on long term arrangements directly to, or guaranteed by, reputable childcare operators.

Investment Benefits
A high level of income, that is largely tax sheltered, with some capital growth potential.
High weighted average lease duration, meaning long term leases providing stability of income flows.
The portfolio is geographically diverse.
The Fund has a strategic alliance with the world’s largest childcare service provider.

Why invest in childcare property?

The childcare industry continues to show growth within the property industry, underpinned by the Federal Government’s strategy to promote the well being of Australian families. Quality and affordable childcare is considered an essential service, and is an industry in which demand is expected to grow given the change in lifestyle patterns of Australians. In parallel with this is labour force participation. It is expected that women will continue to increase their work commitments over the next five years. There will also be a continued shift away from informal childcare.

Consolidation within the industry continues with ABC, the world’s largest listed childcare operator, announcing the acquisition of ASX-listed Kids Campus for $142.2 million. Kids Campus is a leading childcare operator in Australia with 85 centres predominately in Queensland and Victoria.

These factors positively influence the overall profitability of the industry. This in turn leads to an increase in the economic value of those childcare centres which are strategically located within their respective catchments, or are able to create a dominant position in their local markets by offering a superior level of professional service.

As a result, we anticipate the ongoing and increasing demand for well placed, purpose-built and strongly branded childcare facilities, such as those owned by the Fund, should underpin the prospects for strong growth in the values of these centres.

Key features and benefits
Type of investment The Fund is an unlisted unit trust.
Investment objective The Fund’s objective is to provide a high level of largely tax sheltered income with strong growth prospects over the short to medium term.
Investment strategy The Fund aims to maintain a geographically diverse portfolio of primarily purpose-built childcare centre properties located in Australia and overseas, that are subject to long term leases either directly with, or fully guaranteed by reputable childcare operators.
Gearing The gearing level of the Fund will vary from time to time, however we target a long term gearing ratio in the order of 60% to 65%. Any borrowings will be non-recourse to Investors.
Market Capitalisation
(as at 31 Mar 2007)
$221 million
Minimum initial investment $10,000
Minimum additional investment $1,000
Buy/sell spread Normally 5.125%
Fees and other costs There are standard fees and costs that apply to the Fund.
Unit price The Unit Price is calculated in accordance with the constitution of the Fund and is based on the Fund’s net assets.
Distribution reinvestment Yes – optional.
Distribution frequency Quarterly, generally within 30 days of the end of March, June, September and December.
Cooling off As the Fund will invest mostly in assets that are not liquid, there will not be a cooling off period in relation to applications.
Liquidity The Fund is not ‘liquid’ as defined under the Corporations Act and you should regard your investment in the Fund as being long term and illiquid. We will endeavour to make withdrawal offers twice each year of up to 5% of the net value of the Fund per annum.
Risks There are risks associated with an investment in the Fund.

Simply download an Investment Brochure/PDS above. It’s that easy!

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