Australian childcare investment to grow in 2023

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.