What it costs to develop a childcare centre in Australia

A purpose-built childcare centre costs about $30,000 to $35,000 per licensed place to build in Australia in 2026, or $3,500 to $5,500 per square metre, before land, playground and soft costs. A 100-place centre lands near $6.9 million all-in on a Brisbane growth-corridor site and is worth about $7.6 million leased at $4,000 per place on a 5.25% yield.

Developing a childcare centre is a different deal from buying one. You buy land, get a contested approval through council and the state education department, build a Class 9b building to the National Regulations, then sell the finished centre to an investor on a yield or refinance and hold it. The figures below come from 2026 quantity surveyor and builder rates, the CBRE early education report, Stonebridge and Burgess Rawson sales and a private lender's published childcare facility, with a worked example for 100 places. Buying an operating centre instead? Read what a childcare centre costs to buy.

What a childcare centre costs to build per place and per square metre

The industry quotes childcare construction two ways. Per licensed place is how operators, agents and lenders talk; per square metre of gross floor area is how the builder prices it. The national benchmark for a traditional purpose-built centre is $30,000 to $35,000 per licensed place for the building, before land, external works and soft costs, which works out at about $3,500 to $5,500 per square metre depending on city, storeys and finish.

The AU Architecture report shows where the money goes on a real 130-place project at 2026 Victorian rates: fixtures and fittings (kitchen, joinery, cots, lockers, toilets) alone are $643,440, external works and play areas $267,220 and car parking $232,000 inside total construction of $6,798,820, with an 8% professional and statutory fee line taking the project budget to $7.86 million. Three storeys costs about $52,000 per place; a two-storey suburban centre on a flat site sits at $31,000 to $35,000, which is why the Bellfield contract is the fair benchmark for a growth-corridor build.

Modular is the cheaper number that keeps getting quoted, but read the scope. EcoPrestige's $19,000 to $34,000 per place is the factory module craned onto a slab, excluding civils, slab, connections, landscaping, fencing, loose furniture, consultants and contributions. On its own 75-place NSW benchmark the delivered cost is $2.87 million to $3.17 million, or $38,000 to $42,000 per place, 25 to 35% under traditional rather than half.

Land and site: what 100 places actually needs

The Education and Care Services National Regulations size every site. Regulation 107 requires at least 3.25 square metres of unencumbered indoor space per child and regulation 108 at least 7 square metres of unencumbered outdoor space per child. Unencumbered means play space only: corridors, storage, staff rooms, kitchens and nappy change areas do not count. A 100-place centre needs at least 325 m2 of indoor and 700 m2 of outdoor play space, and because outdoor is the binding constraint, the licensed capacity of a site is usually the unencumbered outdoor area divided by seven. Gross floor area runs 10 to 18 m2 per place. Feasly puts typical sites at 1,500 to 4,000 m2, and the sales data agrees.

Council parking typically runs one space per 8 to 10 children plus staff. What the dirt costs depends on whether the approval is on it. DevelopmentReady's Western Sydney survey had DA-approved childcare sites trading at about $40,000 per approved place in 2020 and 2021, with a 50-place Guildford site at $1.51 million ($30,200 per place). Current Childcare4Sale listings show the regional end: a 114-place development-ready site at Sorell in Tasmania at $2 million plus GST ($17,500 per place) and a 100-place DA site in Broken Hill at $350,000. A raw residential block bought before approval is cheaper, but you carry the approval risk and 12 to 18 months of holding cost yourself.

Approvals, playground and fit-out: the soft costs and the timeline

Childcare is one of the most contested land uses in suburban planning, and the approval is the long pole. ChildcareLink budgets $50,000 to $150,000 for DA documentation across the architect, planner, traffic, acoustic, landscape and survey consultants plus a plan of management. The statutory clock in NSW is 40 days for a standard DA and 60 for a complex one; the realistic outcome is 4 to 8 months from lodgement to determination and 8 to 12 months or more where neighbours object. In NSW the Department of Education is a concurrence authority under the Education SEPP and must agree the design meets the National Quality Framework before council can approve; an appeal adds six to twelve months.

The full programme from site to open doors is 18 to 30 months: 2 to 4 months of pre-DA design, 4 to 8 months of assessment, 1 to 2 months for the construction certificate, 10 to 14 months of building (modular runs 5 to 7 months from design lock to practical completion against 14 to 18 traditional), then 1 to 3 months for the service approval that licenses the places. Rent under an agreement for lease does not start until practical completion and service approval are both in hand, so every month of delay is capitalised interest with no income against it.

The playground is the line first-time developers under-budget. Wearthy's 2026 guide puts most childcare playground projects at $150,000 to $400,000 including design, compliant softfall, shade and certification, and EcoPrestige's full site works allowance for a 75-place NSW centre (foundations, connections, fencing, landscape and play equipment) is $1.05 million to $1.35 million. Who pays is a lease negotiation: under a typical agreement for lease the landlord delivers the building and fixed fit-out and the operator supplies loose furniture, resources and often the play equipment, which is why ChildcareLink's $500,000 to $2 million operator fit-out sits alongside, not inside, the developer's budget.

What completed centres sell for: yields and rent per place

The exit is priced off two numbers: the net rent per place in the lease, and the capitalisation rate an investor applies to it. CBRE's March 2026 Early Education report puts passing yields at 4.00% to 6.00% nationally, with 2025 metro trades as low as 3.31% and regional centres often above 6%. Stonebridge and Burgess Rawson frame the market as 4.25% to 5.25% for metro freeholds and 5.25% to 6.25% regional, after 90 to 130 basis points of compression during 2025, and Stonebridge reports $947 million traded nationally in the 2026 financial year.

Rent per place is the other half. CBRE's 2026 benchmarks are $4,500 per place per year metro, $4,000 commuter and $3,000 to $3,500 regional, on net leases with CPI or fixed 3 to 4% escalation and 15 to 20 year terms plus 10 plus 10 options. Live examples: Elderslie at about $4,650 per place, a 90-place Adelaide centre completed in 2026 on a new 20-year lease at $378,000 a year (about $4,200 per place), and Bellfield pre-leased at $396,000 for 110 places ($3,600 per place). The ceiling is the operator's economics: the ATO benchmarks childcare rent at 8 to 20% of revenue and CBRE at 7 to 17%, at 80 to 90% occupancy, and an operator signing above what local fees support is the covenant risk the valuer prices into the yield.

Worked example: a 100-place centre in a Brisbane growth corridor

The figures below are indicative and assembled from the sources above: a 2,500 m2 residential-zoned site in Brisbane's northern growth corridor bought before approval, a two-storey 100-place centre of 1,200 m2 gross floor area built at $2,900 per square metre (about $34,800 per place, close to the Bellfield contract), an agreement for lease signed during the DA at $4,000 per place, and a 16-month non-bank facility. All costs are ex GST with the developer registered and claiming input credits.

Loose furniture and the operator's own fit-out are excluded because the agreement for lease puts them on the operator. The value on completion is the net rent capitalised: 100 places at $4,000 is $400,000 a year, which at a 5.25% yield (the Elderslie, Birtinya and Nirimba band) values the centre at $7,619,000. That is a development profit of $752,000, or 11.0% on cost, before agents and legals on a sale. At 5.0% the value is $8,000,000 and the margin 16.5%; sign a metro-grade operator at $4,500 per place and sell at 5.0% and the value is $9,000,000 and the margin 31%. Go the other way to 5.75%, where Tarneit and Clyde traded in 2026, and the value is $6,957,000, the profit $90,000 and the margin 1.3%.

That spread is the whole lesson. The build cost barely moves between projects, so the margin is set by three things fixed before the slab is poured: land price per place, the rent per place the operator signs for, and the yield an investor pays for that operator in that suburb. The 20% margin most development lenders want is only there if the land comes in under $1.2 million or the lease at $4,500 per place, which is why experienced childcare developers negotiate the operator before they exchange on the site. If you hold, a term loan at 65% of the $7,619,000 valuation is $4,952,000, which repays the $4.78 million facility; rent of $400,000 against interest of about $347,000 at 7% leaves $53,000 a year, a 5.8% yield on cost that only widens as 3% rent reviews compound.

How a childcare development is funded

The agreement for lease with the operator is the presale equivalent and it is what lenders lend against: signed during or before the DA, conditional on planning and service approval, rent from practical completion, a sunset date if approvals fail. No pre-commitment means the facility is priced as speculative commercial construction.

Bank construction debt runs 60 to 65% of cost at roughly 6 to 7% p.a. and expects a strong covenant's pre-lease covering most of the debt. Non-bank senior lenders fund 70 to 80% of cost at 8.5 to 13% p.a.; larger commercial facilities want pre-leases covering 80 to 100% of senior debt. Private first mortgage lenders reach 80% of cost at 10.75 to 14% p.a. Credit Connect Group's Bellfield facility is the live benchmark: $3.96 million, 16 months interest only at 9.75% p.a., a 63% LVR against a $6.3 million on-completion valuation, pre-leased at $396,000 a year. Establishment fees run 1 to 3% with interest capitalised. On completion the exit is a sale or a refinance to a term loan off the yield valuation: banks at 55 to 70% LVR and non-banks up to 70%, from about 6.85% p.a. Land held before the DA can be geared under commercial property finance or property finance, and the build sits under construction finance. Private lending is typically business purpose and not consumer regulated, and every facility is subject to lender assessment. To get a number from Ventas, send the site and DA status, the operator's heads of agreement with rent per place, the builder's contract or QS estimate, your equity, and prior completions. See development finance for how Ventas structures the whole stack.

This is general information only and not financial, credit, or tax advice. Figures are indicative market data from the sources listed, not Ventas offers, and move with the market. Consider your own circumstances and speak to a professional. All finance is subject to lender assessment and approval.

This article is general information only and not financial, credit, or tax advice. Ventas Asset Lending is a finance broker, not a lender. Approvals are subject to lender assessment. Consider your own circumstances and speak to a qualified professional, including your accountant for any tax questions.