Demand for Childcare Assets Intensifies as Sales Turnover Grows by 6.0 Per Cent

Burgess Rawson from CBRE Childcare Director, Michael Vanstone

Australia’s childcare property sector remains a significant focus for private investors, with Burgess Rawson’s sales activity highlighting ongoing strength and confidence in this asset class.

Burgess Rawson recorded $124.2 million in childcare investment sales in 2025, marking almost 6.0 per cent increase on the $117.4 million achieved in the second half of 2024 and bringing the total for the financial year to $241.6 million.

Yields have fallen by between 90 and 130 basis points this year as investors flock to this asset class.

Across metropolitan areas, childcare yields generally range between 4.25 per cent and 5.25 per cent, depending on dollar value, lease terms and location. Regional assets are attracting yields between 5.25 per cent and 6.25 per cent, again, depending on dollar value. These figures remain competitive within Australia’s commercial property market.

The demand fundamentals for childcare remain robust. Australia’s population of children under five has grown to more than 1.75 million, while female workforce participation stays above 63 per cent. For many families, childcare is essential, supporting high occupancy rates and reliable income streams for landlords.

Recent transactions overseen by Burgess Rawson demonstrate strong investor interest. For example, a Goodstart Early Learning centre in Indooroopilly, Queensland, sold for $7.12 million on a yield of 3.96 per cent, reflecting the premium placed on quality assets leased to established operators.

Earlier this year, Burgess Rawson sold the Goodstart Early Learning Centre in Bray Park, Queensland, for $3.861 million on a 3.81 per cent yield, while the Goodstart Early Learning Centre in Wavell Heights achieved $4.12 million on a sharper 3.72 per cent yield, highlighting sustained demand for high-quality childcare investments in the state.

Burgess Rawson’s deep involvement with national operators such as Goodstart Early Learning, Guardian, Affinity, and Only About Children reinforces market confidence. These tenants bring strong brand recognition and financial strength, while lease terms typically extend from 10 to 20 years, with fixed annual rent increases of 3 to 4 per cent or escalations linked to the Consumer Price Index. Many leases also require substantial security deposits or bank guarantees, reducing risk and supporting predictable income for investors.

Higher listings, as investors look to take advantage of favourable conditions, are expected to deliver strong results in the third quarter of 2025.

Government support remains critical to the sector’s outlook, and early signs of increased activity are already evident. Initiatives such as the Three Day Guarantee Program, which will subsidise childcare for approximately 100,000 families, are expected to drive enrolments higher. Funding aimed at workforce retention and wage support is addressing operational challenges, while the $1 billion Building Early Education Fund targets new centre development in undersupplied or fast-growing areas.

Recent sales activity underscores the sector’s resilience and growth potential, with childcare continuing to prove itself as a reliable, income-generating asset backed by strong long-term fundamentals.