Child Care Centres

Child care centre real estate in Australia is worth ~$60bn and growing at ~3%pa.  It represents a deep and liquid market for institutional and private wealth investors.  While there are 0.47 child care centre places per child, large variances between locations point to new development opportunities and scope to grow penetration.

CBRE estimate that the annual growth in demand for child care places is approx. 11,000 pa.  However, there is scope for upside to ~24,000 pa if the new child care subsidy lifts take up rate to around 0.6. Our bear case relies on further falls in fertility rate to 1.30 by 2035.

CBRE estimate the sector trades ~$450m pa of assets, largely through single asset, rather than portfolio deals.  2025 was a banner year with ~$850m of investment volumes. Passing initial yields generally range between 4.00% and 6.00% with differences attributable to specific location, lease covenant and alternative use prospects. We assess yields have tightened by ~9bps over the past 12 mths. We attribute the tightening to renewed investor confidence and competitive pricing across the sector.