The Future Looks Bright for Childcare

The recent Burgess Rawson Industry Insights Report injected confidence in the early childhood sector with compounding government support. This is great news for operators, developers and investors alike.

Here are Mollard Property Group’s key highlights in summary:

For the Investor:

• Sector stability – increased workforce participation and sustained population growth remain driving factors for government investment in early education.
• Government investment – in addition to $13 billion already budgeted, the Australian Government announced a further $4.7 billion in support over the next four years.
• Attractive leasing – on average new leases are between 12 to 15 years making a very strong attraction for investors looking for long term, secure returns.
• Population growth – Australian’s population is forecast to rise to 30 million people by 2033 with increased demand in essential services such as early education.
• Increased rents – over the past decade rents have grown by 87% and by 27% since 2020 alone. This is attributed to rising land values, construction costs and in line with government funding.
• The yields from the sale of childcare centres across Australia in 2023 averaged 5.37%

For the Developer:

• Innovation – centre solutions such as double-storey, energy efficient buildings and basement car parking are on the rise.
• Sustainability – a compelling element of new centre construction with centres seeking cutting edge facilities and innovations.
• Co-location – establishing new offerings such as strategic co-location of swim schools or add on services such as tutoring and convenience for busy parents.
• Price increases – sale prices have grown rapidly over the past decade. Average sale today is $6 million compared to $1 million in 2012. The average median sale by Burgess Rawson $6.25 million since 2022.

For the Operator:

• Enhanced curriculum – the industry is seeing an introduction of more holistic services, catering to the busy family and adding value. Services may include tutoring, health facilities and swimming lessons.
• More funding for early education, including support for conditions like ADHD, as well as speech and occupational therapy clinics, may potentially come from the Australian Government due to their involvement in NDIS services.
• Population growth – Australian’s population is forecast to rise to 30 million people by 2033 causing increased demand in childcare as an essential service.
• Government reforms – in addition to billions of dollars injected into the sector, the Australian Government reforms to entice working parents, particular women back into the workforce will ensure demand continues.

The industry looks bright and evolving as new initiatives take place in the early childhood industry.

Mollard Property Group are specialist consultants in the acquisition, development, design and the business of childcare centres. We offer a one-stop solution service for the entire childcare development process. Talk to one of our team for an obligation free consult about how we can help you invest, develop or operate your own childcare centre. Enquire today.

Mollard Property Group are specialist consultants in the acquisition, design, development and the business of childcare centres. We offer a one-stop solution service for the entire childcare development process. Talk to one of our team for an obligation free consult about how we can help you invest, develop or operate your own childcare centre. Enquire today.