The growth of the Australian childcare sector is expected to continue in 2023, driven by high levels of federal government support and increasing attendance hours, according to a Cushman & Wakefield report.
The rise in weekly attendance hours has led to a 47% increase in rents over the past decade, resulting in an upward trend in prices.
Jake McKinnon, Cushman & Wakefield Research Manager, said the strong tailwinds for childcare centre investment in the Australian market are likely to persist, as investors gain from new subsidies and $4.7 billion in government funding.
McKinnon said that the majority of assets traded on sub-5% yields in 2022, a trend Mr expected to continue. This is driven by the consolidation of assets in a fragmented market, with operators aiming to meet demand through acquisitions and development activities.
The report found that over $520 million worth of childcare centres were traded in 2022, marking a 30% increase from pre-COVID levels.