Unlocking Childcare Opportunities: A Guide for Landowners
If you own a well-located block and an agent has ever muttered the word “childcare” at you, there is a reason. Childcare is one of the few uses willing to pay a premium for land that residential and retail developers walk past — the right corner block, on the right road, in the right catchment, can be worth more to a childcare operator than to anyone else. This is a guide to turning that interest into value without giving most of it away.
The opportunity is real, but it is not automatic. Plenty of landowners hear “your site would be perfect for a centre,” sell too early or too cheaply, and watch someone else capture the upside. The value sits in understanding what you actually own, how far up the chain you want to take it, and what an operator will ultimately pay to occupy it.
Why Childcare Wants Your Land
Demand is the short answer. More than 1.4 million children aged 0 to 12 attended approved care in the March quarter of 2025, and more than half of all children under five now attend approved care — the highest share in a decade (Productivity Commission, Report on Government Services 2026). That demand is still outrunning supply. One developer analysis estimates that meeting policy-driven demand would require somewhere between $3.8 billion and $4.4 billion in build costs alone, before a dollar is spent on land (Billbergia Group, 2026).
Government is leaning into the gap rather than away from it. The Commonwealth’s $1 billion Building Early Education Fund is financing new and expanded centres in under-served, regional, and outer-suburban areas, with 28 projects approved in its first round (Australian Government Department of Education, 2026). For a landowner, the signal matters: this is a sector being actively expanded by policy, not wound back.
The reason childcare pays up for land is structural. A centre’s revenue is capped by its licensed place count, and its place count is set by how much compliant indoor and outdoor space the site can deliver. So operators compete hardest for sites that can hold a viable number of places with good street access and parking — and a site that ticks those boxes is genuinely scarce.
ChildcareLink Insight: The landowners who do best are the ones who find out what their site is worth before they respond to the first approach. An unsolicited offer is an opening bid, not a valuation. We routinely see the same block attract very different numbers depending on whether it is sold as raw land, as an approved site, or as a completed, leased centre. |
Is Your Block Even a Candidate?
Not every site works, and the fastest way to lose money is to chase a development the land can’t support. Before anything else, four things have to broadly stack up: zoning that permits or allows assessment of a centre, enough land area to deliver compliant indoor and outdoor space, safe vehicle access with room for parking and a drop-off flow, and a catchment with real demand and not too much competing supply.
Those four gates — zoning, space, access, and catchment — are the difference between a genuine opportunity and a nice idea. We cover how to run a block through them in detail in our guide to assessing whether a site is suitable for childcare development, and the demand side specifically in how demographics and supply data drive site selection. If your land clears all four, you are holding something operators want.
The Value Ladder: Three Ways to Unlock It
Think of it as a ladder. Each rung adds value — and adds time, capital, and risk. How far you climb depends on your appetite for all three.
Rung 1 — Sell the land as it is
The simplest path is to sell to a developer or operator who handles everything from here. You take a clean price now and carry no planning, construction, or leasing risk. The trade-off is that you are selling potential, so the buyer prices in their own risk, profit, and the cost of the work ahead — which means the lowest of the three numbers. This suits owners who want certainty and a fast exit.
Rung 2 — Get a development approval, then sell
A site with a childcare development approval is a different asset to a raw block. The buyer no longer has to gamble on whether a centre can be built and how many places it will hold — the approval answers both. That de-risking is why approved sites attract strong, competitive demand; agents report record activity for DA-approved childcare and development sites (Ray White Commercial, 2026).
You invest time and money in the development application — design, consultants, council fees, and months of process — and in return you capture the uplift between raw-land value and approved-site value. For most landowners this is the sweet spot: meaningfully more value than a raw sale, without taking on construction. We unpack what these sites are worth and what buyers scrutinise in our guide to DA-approved childcare sites.
Rung 3 — Build it and lease it to an operator
The top rung is to develop the centre yourself and lease it to an operator, holding the finished building as an income-producing investment. This is the highest-value outcome and the most demanding: you fund the build, manage the construction, and secure a tenant. Typical new-build costs run around $30,000 to $35,000 per licensed place (Loumain and architecture-sector cost reviews, 2025), so the capital commitment is real.
What you get in return is a long-leased commercial asset. Done well, the rental income and the eventual sale value of a leased centre comfortably exceed selling the approved site — which is why “build and lease” is the strategy of choice for landowners who can fund it and wait. The economics of that completed asset, including yields and risk, are covered in our pillar guide to childcare property as an investment. A middle path also exists: some landowners contribute the land into a development-and-lease structure or a ground lease, sharing the upside without funding the whole build themselves.
What an Operator Will Actually Pay You
If you climb to Rung 3, the number that matters is rent per place. As a guide, CBRE Research put indicative market rents in March 2026 at roughly $4,500 per place in metropolitan locations, around $4,000 in commuter belts, and $3,000 to $3,500 in regional areas (CBRE Research, March 2026). Multiply by your licensed places and you have a rough revenue line for the investment — a 90-place metro centre at $4,500 implies something in the order of $405,000 a year in rent before escalation.
Childcare leases are also structured in the landlord’s favour. They typically run 10 to 15 years with further options, the operator generally carries the outgoings, rates, and maintenance, and rent steps up each year on a CPI or fixed basis (Mollard Property Group, 2026; CBRE Research, March 2026). That combination — long term, net lease, growing income — is exactly what makes a leased centre such a sought-after asset. We break down how rents are set and benchmarked in our guide to what a fair rent is for a childcare centre, so you can test any number an operator puts in front of you.
ChildcareLink Insight: The quality of your tenant drives the value of your asset more than the headline rent does. A strong, established operator on a long lease will almost always produce a more valuable building than a higher rent from an unproven one — because investors pay for the security of the income, not just its size. Don’t trade covenant strength for an extra few thousand dollars a year. |
The Risks Landowners Underestimate
Three things catch landowners out. The first is local oversupply: childcare demand is intensely catchment-specific, and a suburb with several new approvals already in the pipeline can tip from undersupplied to saturated quickly — which is why the catchment gate matters as much as the site itself. The second is build-cost and timeline blowout for anyone climbing to Rung 3; construction overruns and planning delays erode returns, which is why a proper feasibility study should come before any commitment, not after. The third is selling too early — accepting the first offer on raw land when a modest investment in an approval would have captured materially more value.
Key Takeaway
Your land’s value to childcare depends entirely on how far you take it: raw land sells fast for the least, an approved site captures the planning uplift, and a built-and-leased centre delivers the most for those willing to fund and hold it. Decide which rung suits your appetite for time, capital, and risk before you respond to any approach — because the first offer is rarely the best one your site can command.
Wondering what your land could be worth as a childcare site? Get a quick read with our online estimator, or talk to ChildcareLink for a confidential assessment of your development options. Visit childcarelink.com.au or contact our team directly.
Sources
- Productivity Commission, Report on Government Services 2026 — early childhood education and care participation
- Australian Government Department of Education, Building Early Education Fund, 2026
- Billbergia Group, “Childcare Crunch: $4bn Shortfall Opens Door for Developers”, 2026
- CBRE Research, “Child Care Centres: Intelligent Investment”, March 2026 — rent-per-place benchmarks and lease structures
- Loumain and architecture-sector construction cost reviews, 2025 — per-place build costs
- Mollard Property Group, “A Guide to Successful Childcare Property Investment in Australia”, 2026
- Ray White Commercial / RWC Western Sydney, 2026 — DA-approved site demand
- Education and Care Services National Regulations — indoor/outdoor space requirements
Disclaimer: The information provided in this article is for general informational purposes only and does not constitute financial, legal, or professional advice. ChildcareLink recommends seeking independent professional advice tailored to your specific circumstances before making any business or investment decisions.
