Sterling Property attended this year’s Childcare & Early Learning Leaders Summit in Sydney, joining operators, investors, developers and consultants from across the country for two days of focused discussion on the current state of the sector, as well as opportunities and challenges moving forward.
Here are the key takeaways that matter for childcare real estate.
Investor confidence is returning, but on different terms
Institutional confidence in childcare remains strong, and deal flow remains solid. However, the market has matured. Buyers are more selective, due diligence processes have intensified, and the era of acquiring any asset at any price is behind us.
Capital dynamics have shifted in line with broader economic conditions. RBA rate movements continue to influence yields and debt structuring, and while last year’s transaction market held up well, 2026 has seen some softening driven by global uncertainty. The fundamentals remain sound. The sector has a concrete future, but investors are now doing the work to verify it.
Compliance and governance have become central to renewing investor confidence. Raising the bar here is widely seen as a positive step, not a burden.
WA is holding its own
Sterling Property Senior Partner Jake Wallman spoke on the State Market Benchmarks panel, covering pricing, buyer depth and deal readiness, and the picture for Western Australia remains resilient despite broader uncertainty.
Buyer interest in WA childcare assets sits roughly 50/50 between east coast and local buyers, reflecting the national appetite for quality WA stock. Sub-$5 million assets continue to attract strong buyer activity, with purchasers seeking assets that offer a clear story and reversionary upside. Land values in Perth have risen sharply, which is reshaping how deals are structured and priced.
The broader takeaway: buyers want more from assets now. Fundamentals matter again.
Sterling Property Senior Partner Jake Wallman on the panel, speaking on State Market Benchmarks: Pricing, Buyer Depth and Deal Readiness alongside Jai Sethi (Forte CRE), Jimmy Tat (CBRE), Callum Richardson (Collins Sacre Consulting), moderated by Vanessa Rader (Ray White Commercial).
The quality of operators is improving, and that matters for asset values
One of the clearest themes across both days was a shift in the operator landscape. There are fewer active operators, but better ones. The consolidation pressure that has built over recent years is shaking out weaker players, and what remains is a more professional, more accountable sector.
For landlords and investors, this is a significant positive. Stronger operators mean stronger covenants, more stable occupancy, and more productive landlord-tenant relationships. The message for owners was direct: get back to the fundamentals. Sustainable rent, lease longevity and genuine partnership with your operator are what drive long-term asset performance.
Developer and operator alignment is non-negotiable
Sessions on getting childcare projects built reinforced what Sterling has seen in the WA market. The relationship between developer and operator needs to be established early, and it needs to be detailed.
Getting the brief right from the start, covering design, layout, outdoor space and planning requirements, determines whether a centre works operationally from day one. Development models including turnkey, forward-fund, joint venture and sale-and-leaseback each have their place, but matching the structure to the site, operator and capital behind the project is what separates good outcomes from difficult ones.
Future-proofing centres through reinvestment and close operator collaboration was identified as key to longevity, mutually beneficial for both landlord and operator over the life of the asset.
Brian Neo, Simon Brady and Harry Ayers from Sterling catching up with Dough Shorten from Opteon Solutions at the post conference networking event
Construction costs and land values remain a live issue
Rising construction costs and land prices continue to create pressure across the development pipeline. There is no clean resolution on the horizon, but the consensus view is that those who work hand in hand with operators, sharing data, planning early, and aligning on design, will be best positioned to deliver projects that work commercially.
For Sterling, the summit reinforced both the strength of our existing relationships in the sector and the depth of opportunity still ahead. Jake Wallman and Simon Brady lead Sterling’s childcare advisory practice across WA. For a confidential conversation about childcare investment, development or divestment, contact Jake on 0403 975 298 or jwallman@sterlingproperty.au, or Simon on 0407 486 401 or sbrady@sterlingproperty.au.
