Childcare Sector Bringing New Opportunities for Investors

Childcare centres are considered attractive commercial investments but have a history of being tightly held. However Auckland’s growth and the sector’s rapid transformation in recent years is bringing new opportunities, particularly in fast growing outer suburbs like Hobsonville. 

Early childhood education sector specialist, Investment sales broker Peter Kermode says there are a lot of new childcare developments happening in the Auckland region. "It’s a huge sector, and it’s continuing to grow," Kermode says. 

Latest Ministry of Education figures show the number of early childhood education operators in the Auckland region has grown almost 35 per cent over the last 10 years. 

The childcare sector has historically been dominated by smaller operators running one or two early childhood centres, typically out of older premises like converted bungalows and villas. However Kermode says the market has shifted towards much larger operators who are developing purpose-built early childhood centres. 

Many of Auckland’s new early childhood centres are being built in the city’s expanding outer suburbs, Kermode says. The new Learning Tree Hobsonville childcare centre which is opening in a few months is a great example. The abundant land and fast growing population has made Hobsonville ideal for a new modern Learning Tree childcare development. 

There are many advantages to designing a new childcare centre from the ground up - for the children, the parents and the investors. Modern, purpose-built centres such as Learning Tree Hobsonville, are not only able to capitalize on efficiencies with fit outs and consenting requirements but they offer a range of other benefits. 

Learning Tree's new facilities for example, include great natural light, good ventilation, thoughtfully designed learning environments and plenty of open space. These features attract good staff, and are also very attractive to parents, and that in turn is good for business. 

The sector is viewed as more secure than other asset classes, not only because of the strength of the leases involved but also due to New Zealand's high childcare participation rate. 

Demand for childcare is expected to remain strong as Auckland house prices require families to bring in dual incomes. "I’d urge anyone looking for a solid commercial investment at a relatively affordable price to consider an early childhood education centre," Kermode says. Childcare is a smart investment.