ECEC property market continues upward trend as sector resilience draws investor attention

Australia’s early childhood property sector is experiencing a resurgence, with demand driven by strong demographic tailwinds, government policy settings and the essential service nature of education and care.

New research from Cushman & Wakefield shows that ECEC real estate has gained significant traction in recent months, with the value of transacted assets and the level of investor interest both trending upwards.

While the broader commercial property market has faced headwinds, the ECEC sector remains one of the few asset classes to demonstrate consistent resilience. The findings are detailed in Cushman & Wakefield’s latest Property Playground report, which outlines emerging trends and key drivers shaping the future of childcare property investment.

According to the report, ECEC property now ranks as the fifth-largest alternative real estate sector in Australia, supported by more than $1.8 billion in development approvals each year.

Nationally, more than 8,000 ECEC centres operate across a mix of ownership models, with private operators accounting for roughly 90 per cent of services. The remaining 10 per cent are split between government, not-for-profit, and other community-managed settings.

At a time when many sectors are seeing reduced transaction volumes, ECEC property saw more than $310 million in assets change hands in the past year alone. High demand for long-term, triple-net lease agreements with quality tenants has further enhanced the sector’s appeal to institutional buyers and private investors alike.

What’s driving the demand?

The report attributes this momentum to several factors, including:

• Long-term population growth and rising demand for care, particularly in high-growth urban and regional areas
• Increased female workforce participation, driving the need for accessible, reliable care
• Continued government subsidies and reform programs to improve affordability and access
• Low vacancy rates in many markets, with centres often fully tenanted on long leases

Planning challenges and opportunities

Despite the positive outlook, the report also highlights challenges that developers and providers continue to face. Planning approval processes can vary significantly between jurisdictions, creating barriers for new service development or expansion.

Design standards, site selection, traffic flow, accessibility, and noise compliance are all considerations that can delay or derail proposed projects. Cushman & Wakefield encourages closer alignment between local planning bodies and state-based ECEC policy settings to help streamline delivery of new centres in areas of unmet demand.

With the federal government’s reforms to expand access to early learning, and with demand projected to grow in line with population trends, interest in ECEC real estate is expected to remain strong in the years ahead.

Balancing commercial considerations with service quality and community needs remains a key focus in the development and operation of early learning centres, with an emphasis on thoughtful design, appropriate location, and responsiveness to the needs of children, families, and educators.

To read the Property Playground report in full, visit the Cushman & Wakefield website or access the report directly here.