Three proven methods to value a childcare centre in Australia — EBITDA multiples, capitalisation rates, and per-place benchmarks. Current 2025–2026 market data included.

A buyer’s plain-English guide to reading childcare centre P&L statements — what each line means, where the noise hides, and how to spot the real EBITDA.

Most first-time childcare buyers underestimate the finance stage. They assume that once they find a centre and agree on a price, the bank will lend what they need. Then they discover that childcare is

First-Time Childcare Centre Buyer: What You Need to Know Most first-time childcare buyers spend weeks looking at listings and months dreaming about returns — but almost no time understanding the three things that actually determine whether the deal works: how much of the asking price is real, how much a bank will lend you, and how long government approvals will take. Get those three wrong, and the rest doesn’t matter. Australia’s childcare sector is now worth an estimated $23.6 billion (BizBuyScore, 2025), and the pipeline of first-time buyers has never been deeper. The Three Day Guarantee, which started in January 2026, has expanded subsidised demand, making the economics even more attractive on paper. But the gap between “attractive on paper” and “good deal in practice” is where first-time buyers get hurt. This guide covers what you actually need to know before committing capital — not the theory, but the practical realities we see in transactions every week. Understand What You’re Really Buying A childcare centre isn’t a passive investment. You’re buying a regulated business that requires government approval to operate, qualified staff to run, and families to fill. Miss any one of those three elements and the numbers collapse. There are two acquisition types, and they work very differently: Leasehold (business only): You buy the business — the brand, the staff, the enrolments, the furniture, and the right to operate from a leased premises. Prices typically range from $500,000 to $3 million for a single site. You don’t own the building. Freehold going concern (business + property): You buy both the business and the real estate. Prices range from $3 million to $16 million or more, depending on location, licence size, and lease structure. For a detailed breakdown of how these two models affect value, see our leasehold vs freehold guide. ChildcareLink Insight: First-time buyers often fixate on the asking price without understanding which type of acquisition they’re looking at. A $1.2 million leasehold and a $5 million freehold going concern might generate the same EBITDA — but the risk profile, financing, and exit strategy are completely different. Know what you’re buying before you start negotiating. Know What a Centre Is Actually Worth Childcare businesses typically sell at 3 to 5 times adjusted EBITDA for single-site operations, according to industry transaction data (Benchmark Business Sales, Hinge Advisors). A well-run centre with strong occupancy and a long lease might push toward 5x. A centre with occupancy below 70%, a short lease, or a Working Towards NQF rating will trade at the lower end — or struggle to sell at all. The key word there is adjusted. The EBITDA on the seller’s profit and loss statement is almost never the number a buyer should use. Owner salaries, above-market rent, one-off expenses, and irregular CCS income all need stripping out before you have a reliable figure. We cover this in depth in our complete valuation guide — if you haven’t read it, start there. For first-time buyers, the most common pricing mistake is trusting the headline EBITDA without running your own adjustments. The gap between stated and adjusted EBITDA can be 20 to 40 per cent. That gap is real money. Get Your Financing Right Early Banks treat childcare differently from other commercial purchases. The sector’s government-backed revenue (through the Child Care Subsidy) makes lenders more comfortable than with most small businesses — but their requirements are specific. Here’s what the major lenders typically look for, based on current market practice (Green Finance Group, Home Loan Experts): For leasehold purchases: Expect a loan-to-value ratio (LVR) of 50 to 60 per cent. That means you need 40 to 50 per cent of the purchase price as equity — either cash or security against other property. For freehold going concern: LVR can reach 65 to 70 per cent for purpose-built childcare facilities, meaning a 30 to 35 per cent deposit. Common bank requirements: Most major lenders want to see a centre with more than 25 licensed places, occupancy above 80 per cent, and at least two times interest coverage (meaning the centre’s net income is at least double the annual interest cost). Interest rates on secured childcare loans currently sit in the 5 to 10 per cent range depending on the lender, your credit profile, and the asset. Specialist childcare lenders like Finexia and Green Finance Group often structure deals differently from the big four banks — it’s worth talking to both. ChildcareLink Insight: First-time buyers regularly underestimate how long finance takes to arrange. Start the conversation with your broker or bank before you sign a heads of agreement — not after. A typical childcare finance approval takes four to eight weeks, and lenders will want an independent valuation, which adds time and cost. Navigate the Approval Maze This is where first-time buyers lose the most time. Operating a childcare centre in Australia requires multiple layers of government approval, and you cannot trade without them. Provider Approval: If you don’t already hold ACECQA Provider Approval, you need to apply before — or at the same time as — acquiring a centre. The regulatory authority must decide within 60 days, but if they request further information, that clock pauses. In practice, allow 60 to 90 days. Since April 2025, new providers must also supply a Statement of Tax Record as part of their CCS approval application (Department of Education). Service Approval Transfer: The existing service approval must transfer to you as the new provider. This requires a 42-day notification to the regulatory authority before the transfer date, using ACECQA forms SA04 and SA05. CCS Approval: You need separate approval to administer the Child Care Subsidy. Without it, families can’t claim their subsidy at your centre — which means they won’t enrol. Working with Children Check (WWCC): Every person involved in the management of the service needs a current WWCC. This is non-negotiable. New for 2026: The National Early Childhood Worker Register became mandatory, with providers required to enter workforce information by late March 2026. Child…

What Is a Fair Rent for a Childcare Centre? Rental Benchmarks Explained Rent is the single largest fixed cost in most childcare businesses — and the one that causes the most arguments between operators and landlords. Set it too high and the operator bleeds cash even at strong occupancy. Set it too low and the landlord leaves money on the table, or worse, attracts a tenant who undervalues the property and underinvests in the business. The difference between a fair rent and a bad deal often comes down to three numbers: rent per licensed place, occupancy cost as a percentage of revenue, and the remaining lease term. How Childcare Rent Is Measured Unlike standard commercial property, childcare centre rent is rarely quoted per square metre. The industry standard is rent per licensed place — the total annual rent divided by the number of approved places on the centre’s service approval. According to Cushman & Wakefield’s Property Playground report, rents per licensed place across Australia currently range from approximately $1,500 to over $10,000, depending on location, building quality, and licence size. The national average now sits around $3,500 to $4,000 per place — but that average masks huge variation between cities. In Sydney, $4,000 to $6,000 per place is now standard across most metro suburbs, not just premium pockets. Melbourne and Victoria typically range from $2,500 to $4,000. Regional centres in strong-demand areas like the Central Coast, Hunter Valley, and South Coast of NSW are now seeing $3,000–$3,500 per place, while high-demand Sydney corridors and inner-city locations regularly push above $6,000. For an 80-place centre in Sydney paying $5,000 per place, that is $400,000 in annual rent. At $3,500 per place in a strong regional centre, the same 80 places cost $280,000 — a $120,000 difference that flows straight to the bottom line. ChildcareLink Insight: When we advise operators on a lease negotiation, the first thing we calculate is rent per place — not the headline annual figure. A $300,000 rent on a 60-place centre ($5,000 per place) is a very different proposition to $300,000 on a 120-place centre ($2,500 per place). The licence size changes everything. The Occupancy Cost Ratio: The Real Test of Affordability Rent per place tells you what you are paying. The occupancy cost ratio tells you whether you can afford it. This is total occupancy costs (rent plus outgoings) expressed as a percentage of gross revenue. The widely accepted benchmark for childcare operators is: Rent alone: 8–12% of gross revenue Total occupancy costs (rent + outgoings): 12–22% of gross revenue IBISWorld’s sector data historically placed property-related expenses at approximately 13.5% of sector revenue. Anything consistently above 22% total occupancy cost signals a problem — either the rent is too high, or revenue is too low. Here is what this looks like in practice. A centre generating $2 million in annual revenue can sustainably carry rent of $160,000 to $240,000 (8–12%). If the rent is $300,000, that pushes occupancy costs to 15% before outgoings — still workable if outgoings are modest, but tight if triple net lease outgoings add another 5–8%. ChildcareLink Insight: We see operators sign leases where the rent looks affordable at full occupancy — but they forget to stress-test it at 70% or 75%. A centre that breaks even at 85% occupancy because of high rent has almost no margin for a quiet enrolment quarter. Always model the rent at realistic occupancy, not best-case occupancy. What Drives Childcare Rent Higher or Lower Six factors determine where a specific centre’s rent falls within the $1,500–$10,000+ per-place range. Understanding these helps both operators and landlords negotiate with better data. 1. Location and Demographics Centres in high-income, high-demand suburbs with strong population growth command premium rents. Across metro Sydney, $4,000–$6,000 per place is now the norm — and a centre on the lower north shore or inner west may push well above $6,000. Melbourne metro ranges from $2,500 to $4,000, while regional NSW centres with strong demand (Central Coast, Hunter Valley) are now at $3,000–$3,500 — but they also charge lower daily fees, which is what keeps the occupancy cost ratio in line. 2. Building Quality and Age Purpose-built, modern centres with compliant outdoor space, quality fitout, and efficient floor plans justify higher rents. According to Mollard Property Group, construction costs have risen from approximately $2,500 per square metre in 2014 to around $4,500 per square metre in 2024 — an 80% increase. Landlords who built or refurbished recently need higher rents to cover their development costs. 3. Licence Size Larger centres spread fixed costs (including rent) across more places, which generally means lower rent per place. A 120-place centre often pays less per place than a 40-place centre in the same suburb, even if the total annual rent is higher. 4. Lease Term and Options Longer lease terms with multiple renewal options reduce the landlord’s vacancy risk and increase the property’s investment value. In return, operators can negotiate lower starting rents or more favourable escalation terms. For a deeper look at how lease structure affects both parties, see our complete guide to childcare lease terms. 5. Daily Fee Levels Rent per place means nothing without context on what the operator can charge. A centre charging $200 per day generates roughly $52,000 per place per year at 100% utilisation (260 weekdays). At $150 per day, that drops to $39,000. The same $5,000 per-place rent is 9.6% of revenue at $200/day but 12.8% at $150/day — already above the comfort zone. Operators in lower-fee markets cannot sustain the same absolute rents as those in premium suburbs. 6. Market Supply and Competition In areas with multiple new centres opening — what the ACCC Childcare Inquiry identified as supply growth of 69% since 2013 — landlords face more competition for tenants, which can moderate rents. In undersupplied areas with strong demographics, the balance shifts to the landlord. Common Mistakes in Setting Childcare Rent Landlords Who Set Rent Too High The most common landlord mistake is benchmarking childcare rent against…

One authorised officer, two days on site, and a rating that follows your centre for years. For most operators, the assessment and rating visit is the single most consequential day on the calendar — an

Most childcare centre deals that collapse don’t fail at negotiation. They fail at due diligence — because the buyer didn’t know what to look for, didn’t look deep enough, or discovered a problem too l

How the Three Day Guarantee Changes the Childcare Landscape On 5 January 2026, the Australian Government scrapped the Child Care Subsidy activity test for the first three days of care. Every eligible family now gets 72 hours of subsidised childcare per fortnight — no questions asked about work, study, or volunteering. Backed by $426.7 million in federal funding, this is the biggest structural change to childcare demand in a decade. And for centre owners, buyers, and investors, the implications go well beyond policy headlines. What Actually Changed Before the Three Day Guarantee, families had to pass an activity test to access subsidised care. The more hours parents worked or studied, the more subsidised hours they received. Families with low or no activity — stay-at-home parents, casual workers between jobs, carers — were often locked out entirely or limited to minimal hours. The new rules are straightforward. All CCS-eligible families (combined income under $533,280) automatically receive 72 hours of subsidised care per fortnight — equivalent to three days per week. No activity test required for those first three days. Families who meet higher activity thresholds still get up to 100 hours per fortnight. Aboriginal and Torres Strait Islander families automatically receive 100 hours regardless of activity. The subsidy percentage itself hasn’t changed — it’s still income-tested — but the access floor has risen significantly. According to the Department of Education, around 67,000 families will benefit in the first full year, and more than 100,000 families become eligible for additional subsidised hours they didn’t previously qualify for. Why This Matters for Centre Owners Most commentary on the Three Day Guarantee focuses on families. That’s understandable — it’s a family policy. But for anyone who owns, operates, or is looking to buy a childcare centre, the downstream effects are significant. 1. A New Pool of Demand The 67,000 newly eligible families represent genuine incremental demand. These aren’t families switching providers — they’re families who previously couldn’t access enough subsidised care to justify enrolment. According to the Minderoo Foundation, almost 40,000 parents are now able to return to or increase their work and study hours, meaning their children need care they weren’t using before. For centres with spare capacity — particularly in areas with younger demographics and growing populations — this is a direct occupancy tailwind. The question is whether your centre is positioned to capture it. ChildcareLink Insight: The centres that benefit most from the Three Day Guarantee are those with available places in the under-3 age groups. If your 0–2 and 2–3 rooms are already full, the demand uplift flows to your competitors instead. Audit your room utilisation now — not just total occupancy, but by age group and day of the week. 2. Mid-Week Occupancy Gets a Boost One of the persistent challenges for childcare centres is uneven demand across the week. Monday to Wednesday typically run at or near capacity, while Thursday and Friday often have gaps. The Three Day Guarantee changes the calculus for families who previously only enrolled for two days — the third subsidised day gives them a reason to add a mid-week or late-week session. For operators, this means an opportunity to improve utilisation on traditionally softer days without discounting fees. If you’ve been running at 75% on Thursdays and Fridays, monitor your enquiry patterns closely over the first two quarters of 2026. The uplift may be gradual, but it’s structural. 3. Revenue Per Child May Increase When a family moves from two subsidised days to three, the centre collects fees for an additional day — and the CCS covers a significant portion. For a centre charging $150 per day with families on 70–85% subsidy rates, each additional day adds $105–$128 in government-backed revenue per child per week. Multiply that across 10 or 20 families upgrading their enrolment, and the revenue impact is material. This is particularly relevant for centres where occupancy has been capped by the educator shortage. If you can’t add new families because you can’t hire enough staff, the next best outcome is existing families booking more days — and the Three Day Guarantee creates exactly that incentive. For more on the staffing challenge, see our guide to the educator shortage crisis. 4. The Staffing Constraint Tightens Further More demand sounds good on paper. But every additional child-day requires educators to maintain mandatory staff-to-child ratios. If your centre is already struggling to recruit — and according to the Australian Childcare Alliance, 90% of centres are — then absorbing new enrolments means either hiring more staff or turning families away. This creates a two-speed market. Well-staffed centres with recruitment pipelines and competitive wages will capture the demand uplift. Understaffed centres will watch that demand flow elsewhere. The Three Day Guarantee doesn’t solve the educator shortage — it intensifies it. Operators who have invested in retention and above-award wages are now in the strongest position. What This Means for Buyers and Investors If you’re evaluating a childcare centre acquisition in 2026, the Three Day Guarantee should feature in your analysis. Occupancy Upside Centres currently running below 80% occupancy in areas with young, growing populations now have a structural tailwind. The gap between current occupancy and achievable occupancy may narrow faster than historical trends suggest. When modelling future revenue, factor in a modest occupancy uplift of 3–8 percentage points over 12–18 months for centres in the right demographic catchments. But be cautious. The guarantee doesn’t create demand where there are no families. A centre in an ageing suburb with declining birth rates won’t suddenly fill rooms because the activity test was removed. Demographics still drive the underlying demand — the Three Day Guarantee simply removes a friction barrier for families who already want care. For a deeper look at how occupancy affects value, see our occupancy improvement guide. Valuation Implications Higher occupancy means higher revenue, which means higher EBITDA — and ultimately higher valuations. For a detailed breakdown of how childcare valuations work, see our complete valuation guide. The key point here: a centre that…

Staffing is the single biggest operational challenge facing Australian childcare centre owners right now — and it is not going away any time soon. With over 90% of centres reporting difficulty filling

What Parents Actually Look for When Choosing a Childcare Centre Every childcare centre owner thinks they know what parents want. Affordable fees. A convenient location. Nice facilities. But when you look at how families actually make enrolment decisions, the picture is more nuanced — and the centres that understand this fill places faster than those that don’t. The NSW Productivity Commission surveyed more than 2,000 parents and found that families value choice, flexibility, and access more than lower cost in most cases. That finding alone should reshape how operators think about attracting families. If you own or manage a childcare centre, understanding the parent decision-making process isn’t just a marketing exercise — it directly affects your occupancy, your revenue, and ultimately your centre’s value. The Six Factors That Drive the Decision Parents don’t pick a childcare centre from a spreadsheet. The decision is emotional, practical, and heavily influenced by trust. But across the research, six factors consistently rise to the top. 1. Location and Convenience Location is the first filter. Parents need a centre that fits into their daily routine — close to home, close to work, or on the commute between the two. A centre that adds 20 minutes to a morning drop-off simply won’t make the shortlist for most families, regardless of how good the programme is. But location alone is not enough. The NSW Productivity Commission found that less than 20% of childcare centres in New South Wales offer flexible hours (before 7:00 am, after 6:30 pm, weekends, or overnight care). In Victoria, Queensland, South Australia, and Western Australia, more than 50% of centres do. If your centre operates rigid 7:00 am to 6:00 pm hours in an area with commuting parents, you may be losing families to competitors who offer an extra 30 minutes at each end. ChildcareLink Insight: When we assess a childcare centre for sale, one of the first things buyers ask about is the catchment — how many children aged 0–5 live within a 5-kilometre radius, and how many competing centres serve them. Location is the one factor an operator cannot change after purchase. Everything else on this list, you can improve. 2. Educator Quality and Stability Parents consistently rank the quality of educators as one of the most important factors — sometimes the single most important factor. They want to see staff who are warm, attentive, and genuinely engaged with the children. Qualifications matter, but what parents notice first is how an educator interacts with a child during a tour. Staff stability matters equally. High turnover creates anxiety for parents. A child who bonds with an educator and then loses them every few months is unsettling — and parents talk about it. In centres with chronic turnover, word-of-mouth referrals dry up. Australia’s childcare sector is currently experiencing a significant workforce challenge. According to the Australian Childcare Alliance, 90% of centres report difficulty filling educator positions. Jobs and Skills Australia estimates the sector needs 21,000 more qualified professionals. For a deeper analysis of how this workforce crisis affects centres, see our complete guide to staff-to-child ratios. 3. First Impressions and the Tour Experience Research from the Australian Institute of Family Studies shows that childcare enrolment decisions are heavily planned — parents gather information over weeks or months, visiting multiple centres, reading reviews, and asking for recommendations before committing. The centre tour is often the decisive moment. Parents are assessing everything: how clean the facility is, how engaged the children look, whether staff acknowledge them, and whether the outdoor space feels safe and stimulating. A tired-looking building with peeling paint and cluttered rooms will struggle to convert tours into enrolments, even if the educational programme is strong. What many operators underestimate is the role of the administrative experience. How quickly did you respond to the initial enquiry? Was the tour easy to book? Did someone follow up afterwards? These small touchpoints shape perception. For practical strategies on improving your enquiry-to-enrolment conversion, see our guide to increasing occupancy. 4. Reputation and Word of Mouth Personal recommendations carry more weight than any advertisement. Parents ask friends, family members, neighbours, mothers’ groups, and local Facebook communities for childcare recommendations. A single strong referral from a trusted person can outweigh everything else on this list. Online reviews have also become a significant factor. Google reviews, CareforKids ratings, and social media commentary all influence parent decisions. A centre with a 3.5-star Google rating will struggle against a competitor with 4.8 stars, even if the lower-rated centre has a superior programme. The practical takeaway: reputation is built one family at a time. Centres that invest in genuine relationships with existing families — through regular communication, responsive feedback handling, and meaningful parent engagement — generate the referrals that keep waitlists full. 5. Programme Quality and NQF Rating Parents are increasingly aware of the National Quality Framework (NQF) and its rating system. According to ACECQA’s 2025 Annual Performance Report, 92% of assessed services now meet or exceed the National Quality Standard. That sounds positive for the sector, but it also means that a centre rated “Working Towards” stands out for the wrong reasons. For parents who check — and more do every year through ACECQA’s Starting Blocks website — a rating of “Exceeding” signals a centre that goes beyond minimum standards. It suggests better-trained educators, stronger educational programmes, and more thoughtful environments. But NQF ratings tell only part of the story. What parents actually experience matters more. A centre rated “Meeting” that delivers warm, consistent, high-quality care will retain families better than an “Exceeding” centre with high staff turnover and poor communication. 6. Cost, Availability, and Flexibility Cost matters, but not in the way many operators assume. The NSW Productivity Commission’s research found that parents prioritise access and flexibility over price reductions. The most common complaint is not that childcare costs too much — it’s that parents can’t get a place when they need one, on the days they need it. The ACCC Childcare Inquiry reported widespread lengthy waitlists across Australia,…