Valuing a Childcare or Early Learning Centre in Melbourne

From a purpose-built centre in Craigieburn to a converted house in Camberwell: priced against what similar Victorian centres have sold for, then checked against the earnings the rooms reliably produce.

Childcare centres in Melbourne are valued mainly on comparable sales, because enough centres change hands to give real evidence. Those sales are read per licensed place and as a multiple of maintainable earnings, adjusted for sustainable occupancy, the quality rating, the lease and any funded kindergarten program, then tested by capitalising earnings with a paid centre director in place of the owner.

When Melbourne centre owners ask for a valuation

Most requests come with a transaction attached. An operator group has written to the owner of a large centre in Point Cook with an offer. Two siblings who built a centre in Mernda together disagree over what one should pay to buy the other out. A property settlement in the Melbourne or Dandenong registry of the Federal Circuit and Family Court needs the business valued as at a fixed date. A bank wants a figure before funding a second site in Clyde. Or a family group is moving its centres into a new structure and the ATO expects a market value.

The other reason is preparation. Buyers in this sector are mostly experienced groups with their own analysts, and an owner who arrives without a considered figure is negotiating against people who have one. A valuation two or three years before a sale also shows what is holding the price down: rooms running below their licence, a lease with too few years left, a rating that needs lifting, or a roster that leans on agency educators.

Book a Free Consultation

A certified valuer will listen to your situation and answer any questions you may have, at no cost.

Andrew Mackson
Andrew Mackson, CFA, ABV, CBV
Managing Partner · 15+ years
Book a Free Consultation →

Why comparable sales lead for childcare

The Market Approach leads. Long day care centres in Melbourne sell often enough, to operator groups, private owners and investors, that real transactions say more about value than a forecast built from scratch.

We use the guideline transaction method. Sales are filtered for licensed places, occupancy, rating, unexpired lease, catchment and whether the freehold went with the business, then read as a multiple of maintainable earnings and per licensed place.

A short list of genuinely similar sales does more work than a long list of loose ones. A large purpose-built centre on a fresh lease in Wyndham and a small centre holding over in a converted house in Hawthorn are not evidence for each other, whatever month they sold in.

Income cross-check

We capitalise maintainable earnings with the owner's own hours on the floor or in the office replaced by a paid centre director at market cost. That test catches the centres whose profit exists only because the owner works without a wage.

Asset cross-check

Fit-out, outdoor play areas, furniture and equipment at what they would fetch now, plus the building if the owner holds it. A freehold is valued as a separate property interest, because investors and operators price it on different returns.

Adjustments a childcare valuation turns on

Two valuers most often part ways over normalisation, so every adjustment appears in the report next to the reason it was made. In childcare the ones we make most often are:

Childcare across Melbourne

Melbourne's childcare market splits along lines a buyer cares about. The growth corridors through Wyndham, Melton, Hume, Whittlesea and Casey are where large purpose-built centres open alongside new estates, often leased from investors, and where new supply can arrive faster than families do. The established eastern and bayside suburbs, from Boroondara through Glen Eira to Bayside, carry smaller centres in converted houses with long waiting lists and little room to add places. The inner north and the CBD fringe sit in between, with high rents and steady demand from working parents.

Victoria adds a layer that matters to the numbers. Many long day care centres here deliver a funded kindergarten program, so income arrives through two channels: parent fees supported by the Commonwealth Child Care Subsidy, and Victorian Government funding for the kindergarten program. The Best Start, Best Life reforms are changing funded kindergarten hours over the coming years, and a buyer will ask how that affects the centre's rooms, staffing and fees. Services are assessed against the National Quality Standard by the regulatory authority within Victoria's Department of Education, and the council planning permit often caps how many children a site can take, whatever the building could hold.

The service approval sets the ceiling, not the trading position. A centre licensed for 100 places and filling 72 is valued on the 72 it can sustain, and the gap is paid for only where the catchment's growth and nearby supply suggest it will fill. The sector is still expanding: health care and social assistance, the ABS division that includes child care services, grew its business count 6.7 per cent nationally in 2025 to 2026 (Source: ABS, Counts of Australian Businesses, July 2022 to June 2026, released 18 August 2026). More centres means more sales evidence, and more competition for enrolments in the corridors.

6.7%
growth in health care and social assistance businesses nationally in 2025 to 2026, the division that includes child care services
Source: ABS, Counts of Australian Businesses, July 2022 to June 2026, released 18 August 2026
2 streams
of income in many Victorian long day care centres: parent fees backed by the Child Care Subsidy, and state funding for a kindergarten program
Cap, not value
the licensed places on a service approval set the maximum; value follows the occupancy a centre can hold

What goes into the report, and how it stands up

Each report opens with why the valuation was done, the standard of value, the valuation date and the material we relied on, including where that material falls short. It then works through every approach we considered and the method used under each, lists each normalisation adjustment with its reason, and brings the results together into a range, with the weighting explained in plain words.

That explanation is what holds when a figure is challenged. If a report cannot say why comparable sales were preferred to an earnings model, or why the centre was placed where it was among those sales, a second expert will find the gap, whether in a property settlement before the Federal Circuit and Family Court in Melbourne or a dispute between co-owners in the Supreme Court of Victoria. Our reports are prepared in line with APESB, APES 225 Valuation Services and signed by a certified valuer who will stand behind them.

A question for whoever values your centre

Which assumption would a reviewing expert attack first, and how would you answer them? A clear, immediate reply is the sign the work is complete.

Matching the report to the purpose

An Indicative valuation is a good starting point when an operator group has made an approach and you want your own figure before replying. It is for internal decision-making and is not written for third party reliance. A Summary report fits a sale to a private buyer, a co-owner buying in, or a bank funding a second centre. A Detailed report is the right level for a family law settlement, a falling-out between owners, or any matter where another expert will read it closely.

Who will rely on the figure decides the depth. Where a court, a lender, the ATO or an opposing expert may test it, the report needs to carry its full reasoning.

Indicative

For internal decision-making. Useful for testing an offer, setting an expectation before a negotiation, or deciding whether to go to market. It is not written for third party reliance.

Summary

Sets out the approaches applied, the normalisation adjustments made and the reasoning behind the conclusion. The usual choice for a sale, an ownership change or a finance application.

Detailed

Applies and reconciles all relevant approaches in full. The level required where a court, the ATO, a lender or another expert will review the opinion.

Compare the three report types

Questions Melbourne childcare owners ask about valuation

Mostly by reference to what comparable Victorian centres have actually sold for. We narrow recent sales to centres with a similar number of licensed places, occupancy, quality rating, lease and catchment, read them per place and as a multiple of maintainable earnings, and then test the answer by capitalising earnings after an owner who works in the centre is replaced with a paid centre director.
There is no metropolitan rate worth quoting. A place in a full centre in Kew on a long lease and a place in a half-full centre in a new Tarneit estate are different assets. What sets the figure is how many places are filled week in and week out, the daily fee the catchment will bear, the rating, the years left on the lease and whether the building comes with the business. The report names the sales used and explains why the centre sits where it does among them.
Enough to matter, and it works in two ways. Families look at the rating when choosing a centre, so it feeds into occupancy, and a buyer weighs what it will cost to hold or lift it. A Working Towards rating usually means a buyer allows for remediation spending and slower enrolments, and the price reflects both until the regulator reassesses the service.
Not unless the engagement asks for it, and even then it is a separate valuation. Investors buy childcare freeholds for the lease and the tenant; operators buy the business for its earnings. Where the owner, a family trust or an SMSF holds the building, we swap the rent in the accounts for a market rent before valuing the business, so an internal arrangement neither inflates nor depresses the trading result.
Certified reports are delivered from seven business days once the information is in. What usually decides the pace is how quickly the centre can supply three years of accounts, weekly occupancy by room, the service approval and current rating, the lease, staff rosters and any funded kindergarten agreement.
Only to the extent it turns into enrolments. In a Melbourne catchment where supply is tight, a list that has filled vacancies as they arose supports the occupancy figure the multiple is applied to. Lists padded by families registered at three or four centres at once, or by names that never answer an offer, add nothing, and a buyer's diligence will test the conversion record.
Many Melbourne long day care centres run a funded kindergarten program, so part of their income arrives as Victorian Government kindergarten funding, including Free Kinder, rather than as parent fees and the Child Care Subsidy. We check that the program is approved for the service, whether it rests on one degree-qualified teacher, and how changes to funded hours under the Best Start, Best Life reforms are likely to affect rooms, staffing and fees. That income is treated as maintainable only if the centre can keep meeting the program's conditions.

Book a Free Consultation

Talk your situation through with a certified valuer before you commit to anything, at no cost.

Andrew Mackson
Andrew Mackson, CFA, ABV, CBV
Managing Partner · 15+ years
Book a Free Consultation →

Related pages

Certified Valuation Reports From Seven Business Days

Every report is signed by a credentialed certified valuer and built to withstand ATO, ASIC, court and bank scrutiny.

Book a Consultation