“Despite the early learning sector having several $50 million plus operators, support was immediately provided with around one million families receiving the assistance.”
Leading into the coronavirus pandemic, there was still some residual damage lingering in the sector following the collapse of Eddy Groves’ ABC Learning a decade ago.
The collapse left many investors nervous about the notion of childcare centre investment relative to their stage of life and tolerance to risk.
However demand has picked up over recent years, with approximately 1.3 million children across Australia accessing some form of funded early learning education leading into 2020.
According to recent figures from Burgess Rawson, Perth and Canberra experienced the highest growth over the past twelve months, with upwards of 2,600 locations leased to new early learning centres across both cities, accounting for 75 per cent of deals.
“Investors are looking to de-risk and seek clean, passive investments,” Thomas said.
“Childcare as an asset class continues to offer attributes that investors are favouring such as long net leases, quality tenants underpinned by land value and intrinsic business value.”
During the pandemic, occupancy rates fell sharply across many portfolios, with the industry challenges concerning revenue decline widely publicised.
Despite this, childcare providers received 50 per cent of fees based on a February reference period, plus Job Keeper, enabling many providers to record a net profit increase.