The Perth real estate market has always offered diverse and appealing opportunities for investors. One segment that is currently standing out is childcare centres, with increased Federal Government support attracting investor interest. WA has approximately 1,300 Child Care Subsidy-approved centres, but also has fewer places overall compared to most other states to support the growing population. With population growth inevitable, investors are looking towards infrastructure for the next generation.
Federal Government childcare support
The Federal Government has demonstrated a strong commitment to supporting the childcare sector, making it a more secure and promising investment. The October 2022 budget increased subsidies for low and middle-income families, designed to make childcare more affordable for families but at the same time improving the economic stability and growth of the sector, making it an attractive investment option. In July 2023, the Federal Government’s $4.7 billion childcare subsidy changes will come into effect. For families earning $80,000 or less, the childcare subsidy will increase to 90 percent. With the government addressing issues directly impacting childcare, investors can be comfortable knowing the sector is secure.
Childcare near you
Perth’s growing population, coupled with an increase in dual-income households, has led to a surge in demand for childcare services. Perth’s population is expected to increase to 3.5 million by 2050. These families will be seeking quality childcare centres that are conveniently located near their homes or workplaces. As Perth grows out, so will demand. This robust demand ensures high occupancy rates and steady income for investors.
Long-term leases
Childcare centres typically operate under long-term leases, often ranging from 10 to 20 years. These extended leases provide investors with consistent rental income and a sense of security. Tenants often have a vested interest in maintaining the property, given the nature of their business, which can help preserve the property’s value over time.
Demand for Childcare Centres
The growing demand for childcare services and limited supply of suitable properties creates a favourable market for capital growth. Operators commonly prefer a centre that can cater for at least 75 to 95 places, which can require land of around 1,850sqm to 2,750sqm, yet relatively few sites that meet these requirements are available in growth locations. Where the right-size site can be found — ideally located close to primary schools, near shopping centres, or in areas where there is a high proportion of young families — there’s a strong opportunity for capital growth.
Positive Social Impact
Investing in childcare centres not only offers financial benefits but also contributes to a positive social impact. High-quality childcare services play a critical role in the community, supporting working parents and contributing to early childhood development. This aspect can be particularly appealing to investors seeking investments that align with their values.
Childcare centres in Perth present a compelling investment opportunity, driven by strong government support and robust demand. As the sector continues to grow and evolve, it’s an area that savvy investors should consider adding to their portfolios. Don’t wait until it’s too late, get in touch with us today to take advantage of this opportunity.
