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Developing a childcare centre is a wise investment move

Childcare assets prove to be resilient in the current economic conditions

Despite rising interest rates, property market experts argue it could be an opportune time for investors to capitalise. Australia’s cash rate rose to 0.35% at the beginning of May 2022. This is the biggest and only cash rate increase in Australia, since 2010. Industry experts believe this increase will have a positive impact for investors as the key contributing factor is that rents will continue to rise.

James Gerrard, financial planner for FinancialAdvisor.com.au, said: “investors should use this time to review their property portfolio for dead weight”. Investors should look for value-adding strategies to increase equity through their portfolio. Rising interest rates can act as a catalyst for investment property owners to remove unproductive assets and make way for greater investment opportunities in alternative assets offering maximum returns and high yields such as childcare assets.

Now could be the time to consider developing a childcare centre as a wise investment move

Inflation and initial interest rate rises have had little impact on childcare assets,

and there are several reasons as to why:

  • Current economic conditions are driving the volatility of the stock market. This makes commercial property, inclusive of childcare centres, arguably the best class of defensive investment.

  • Commercial property has historically performed during periods of rising inflation. This is due to the nature of long-term leases; annual rent increases and outgoings generally being paid by the tenant.

  • Commercial property provides more accessible depreciation benefits.

  • Continued demand for childcare as an essential service

Childcare assets are extremely resilient and are proving to be one of the strongest and safest passive-income assets in an investment portfolio today. Childcare assets are backed by growing long term demand for quality childcare places and powerful Government support, whilst also providing high returns on investment. Additionally, the new Labor Government, Childcare Policy, promises to relieve the costs of childcare to 90% of the Australian population. Labor predicts the money invested by the Government into childcare rebates will fund the policy itself through job creation and increased workforce participation. This is a huge win for the childcare sector and investors looking for secure set and forget growth.

Mollard Property Group are specialists in Childcare Centre Design, Development, Acquisitions and Leasing, with over 80 years combined experience and 100% success in development approvals. Our comprehensive investment model can help you invest effortlessly with minimum risk into the lucrative world of childcare centre property development. Our in-house team offer a one-stop-solution for the entire development process, including site selection, securing a tenant, centre design, council approvals, due diligence, and town planning - all prior to committing to a project. We assist you to de-risk the process whilst maximising your return through development.

Mollard Property Group have opportunities for investors looking to secure long term investments in developments for the childcare sector. Discover the real value of developing a childcare centre... talk to the experts that make it child's play! Contact us now

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