A Step-by-step Guide in a Child Care Centre Property Development
As a child care development expert, we always advise our clients to prepare a good business planning before investing time and money in acquiring a site or developing a child care centre. To systematically evaluate any investment opportunity, we recommend you following our below step-by-step guide, as shown in Figure 1 below – this will increase your chance of mitigating your investment and financial risks and maximising your monetary returns in childcare investment and development.
This step-be-step guide shown is very useful in providing you guidance in identifying right development sites before investing money and time in designing a childcare centre, all the way to finding a right childcare operators to take up a long lease of your site and development. In summary, successful investment in the child care industry, from land acquisition, design and development to leasing or selling the development, requires specific consideration in:
- Physical aspects of the land – this will land suitability for a child care centre, i.e. land contours, allotment configuration and size, close to destinations where families are regularly visiting (such as primary schools, shopping centres);
- Legal aspects – this will inform the chances of getting town planning approval (i.e. town planning zoning and overlays, title restrictions);
- Economic aspects – this is about assessing business viability of a given centre, largely informed by market assessments (also known as needs assessments) – this will inform what a local catchment looks like, how well local community is serviced by the existing supply of licenced places, how well the existing centres are occupied, needs of additional places. This is to ultimately inform future operators of the operating risks and the chances of a new centre to be financially sustainable .

Creating Childcare Demand-Driven Developments
Investing in areas where childcare demand surpasses supply presents a promising environment for childcare operators to establish profitable businesses with reduced competition. Additionally, it offers property developers an opportunity to attract greater interest from childcare operators. This heightened demand can translate into more attractive rental rates and favorable lease terms for developers, along with better-quality rental offers and tenant profiles. By addressing the unmet need for childcare services in these areas, operators can capitalize on a receptive market, leading to sustainable growth and success.
Site Selection and Design Consideration
With past experience, a long-term success of a childcare centre often requires:
- Collaborative partnership with operators to achieve good design of the centre;
- Good retention of children, i.e. consistent quality of care to meet parent expectations;
- Well located, with good arterial road visibility, proximity to primary schools, shopping centres, community and recreation facilities and other places where families would visit regularly. Good synergy is also seen between childcare and aged care facilities.
Optimal Childcare Centre Size: Favoring Smaller Establishments
Smaller centres (with under 100 licensed places) tend to have lower risks to operators, compared to larger centres. Most of operators are operating centres sized 90-100 licensed places, which is projected to be favoured over a long term period.
How to Obtain Town Planning Approval?
Once you have made up your mind to proceed further with a child care centre development, the next step is to obtain town planning approval. A town planning application for a child care centre usually takes about 6-8 months. For details about a town planning process, please click here.
Exit Strategy
Another ‘must’ task is to prepare an exit strategy, if a childcare development is not considered suitable at a particular location. The default strategy is to develop the site for housing purposes, whilst it may be worthwhile investigating alternative commercial uses, i.e. medical centre.
Regardless of what you facilitate at your site in the end, it is always a good idea to acquire a development site with good capital growth in land value.
Need Professional Help?
If you require technical assistance, please contact Hong Knowling, Principal, via email info@cautious-caiman-ctciu.instawp.xyz or 0434 147 607.
Our Director, Hong Knowling, was interviewed by Cheryl Leong from Property Development Australia. Interview details are included below.
Part 1: Developing and Investing in Childcare Centres
Part 2: Developing and Investing in Childcare Centres
2020 Australian Child Care Market: Sector Overview & COVID-19 Impacts
The year of 2020 has seen a somewhat subdued property development and property investment market, impacted by the Covid-19 pandemic. During this time, the essential services property sector is one of the most stable and least affected of the current market.
The Child Care Industry is considered as an essential services sector. For many years, the childcare industry has received strong political support from all parties due to the benefits it provides in terms of workforce participation to the Australian economy. In a post-COVID-19 Australia, this sector will continue to play a crucial role to provide safe and quality care to the children so that parents can return to the workforce, which ultimately enhance the Australian economy.
Over the past years, the portfolio of the Child Care Industry has been expanded significantly as a profitable investment. We have produced a research report, providing an overview of the Child Care Industry (trends & risks), factors driving demand and supply in childcare services, and impacts of COVID-19 in the industry. You may click here to access our report.