Demand for childcare facilities have increased in the nation due to several driving forces.

Colliers Research Manager, Yashwini Halai said “The recent surge in demand for childcare services nationally as a result of population growth and both parents going into the workforce, has caught the attention of investors.”

According to the Australian Bureau of Statistics (ABS), Western Australia alone recorded a total population of approximately 169,100 children under the age of four in the year ending June 2023.

Projections indicate a 6.5% growth in this age cohort by 2031 in Western Australia further fueling the demand for childcare facilities in the state (.idSAFi).  This growth will create opportunities within the industry as the need to service the increased number of children requiring care continues to grow.

Colliers Director of Investment Services, James Baker said “We are seeing an uptick from childcare operators looking to acquire suitable sites to develop new centres.  The importance of location for any new centres will determine the demand, revenue, daily operation, and the ultimate success of the centre.

“Childcare centre catchments are typically with 5km of homes, place of work or schools. With the growing labour force participation, a key driver to childcare development is the ease of which parents can drop off and pick up children before and after work” Mr Baker added.

Despite challenges such as the impacts of COVID-19, staff shortages, government regulations, and inflationary pressures, the childcare market remains highly attractive to various investors, including high net worth individuals and Australian Real Estate Investment Trusts (A-REITS).

Colliers State Chief Executive for Western Australia, Richard Cash said “the childcare market has been highly desirable by a range of investors in Western Australia. Institutional and private investors have capitalised on childcare investments in the past two years, expanding their portfolios and development pipelines with key assets in WA.”

The childcare industry in Australia is anticipated to have revenue growth of 6.2% in 2023-24 which has been accelerated by the changes in the Childcare Subsidy. In the longer term, revenue is forecast to grow 3.1% per annum over the five years to 2028-29 to an estimated $20.3 billion nationally (IBISWorld).

The Colliers Childcare Report delves into the dynamics of the childcare market, offering insights into recent market trends, demand catalysts, significant barriers, key industry players, and notable transactions in Western Australia.

 To read the full report click here.