Newcore Capital acquires GBP8 million of early years education properties

Newcore Capital Management, a social infrastructure investment manager, has acquired a further GBP8 million of early years education properties in Greater London as part of its GBP80 million investment push in the sector.

The properties, which have been acquired from private and public sector vendors for Newcore Strategic Situations IV LP, a new GBP150 million value-add fund for institutional and family office investors, are located in Coulsdon, Eltham, East Dulwich and Loughton. 

They follow the acquisitions earlier this year by the fund of early years education properties in Streatham, Brixton, Bromley, Orpington and Twickenham and increase the fund’s childcare pipeline by 430 childcare places. The portfolio is forecast to have a stabilised value of GBP40 million, delivering a yield on cost of 6.5 per cent. 

Newcore has let the property in Loughton, located on Connaught Avenue, to Monkey Puzzle Day Nurseries on a 25-year lease. Planning applications have been submitted to convert the properties in East Dulwich and Eltham into 195 and 80-place childcare facilities respectively for N Family Club and Fennies Day Nurseries. The property in Coulsdon, located on Chipstead Valley Road, is let on a short lease to Bright Horizons Family Solutions.

Newcore has now delivered more than 1,000 new or refurbished childcare places in the capital and south east over the past four years.

Harry Savory, chief investment officer of Newcore, says: “Creating fit-for-purpose, sustainable properties for modern educational uses is a key focus for Newcore. We are on target to invest GBP80 million in the sector by the end of June 2021”.

Newcore Strategic Situations IV LP, a GBP150 million value-add fund, continues the value-add strategy which Newcore has successfully executed since 2012 and follows the completion of the GBP40 million investment programme for its Newcore Strategic Situations III LP fund. The fund will aim to deliver an annual 14-16 per cent net internal rate of return to investors. As at 30 September 2020, the fund had acquired 18 assets, valued at GBP66.3 million.