Childcare assets now rank amongst the most sought after commercial investments in Australia, proving to be one of the strongest passive income assets you can have in an investment portfolio today.
This industry is driven by a change in social needs. Families have increased demand on childcare services with both parents working, therefore we’re seeing a record amount of investment from the government to support this industry’s growth and stability.
With a rapidly growing population there will always be a demand for early learning education.
- Growing industry demand
- Long-term favourable lease structures
- Government subsidy and sector investments
- Strong underlying business
- Fastest-growing commercial real estate investment class in recent years
- High land values + capital growth
- Profitable return, generally 5% yields
- Development returns of 20% + on the right location
- High appeal to on-sell as an asset
Recent childcare centre sales in metropolitan areas
The childcare sector continues to display a resilient nature, as essential services remain top of investors’ lists. Nationally metropolitan yields have remained robust, averaging 5.11% demonstrating the underlying demand for high-quality investments in this sector.
De-risk your investment with Mollard Property Group
If you are missing any of these keys to success in your childcare investment strategy it’s time to reach out to our team for an obligation free consultation.
- Source a prime location
- Ensure your building is well-designed and compliant
- Attract and secure a high-quality tenant
- Maintain your objectives, timelines and overall centre costs
- Bridge the gap between developer and childcare centre operator
- Detailed financial analysis and development report
What’s included in our development report and financial analysis?
- Site suitability analysis
- Land and acquisition
- Development expenses
- Construction expenses
- Finance expenses
- Indicative project timeline
- Proposed net base rental and income schedule
- Property value on completion
- Development profit margin
- Appropriate rental and lease terms
- Recent childcare centre sales
Childcare Centre Development – Case Study
The following detailed childcare centre development case study is based on a typical standalone double storey, 96-place childcare centre development with 21 at-grade car spaces, built to a tenant’s specifications as a buy + develop + hold model. The proposed childcare centre has great exposure to passing traffic, being located in-bound to the CBD and on the border of four suburbs.
The financial analysis below demonstrates the potential returns for the investor and how a positive cash flow can be achieved from year two onwards. Download the brochure to see the full case study and detailed financial analysis.
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