The predicted nation-building social and economic benefits of getting more Australian children into early education is driving a boom for one of Australia’s largest early education developers, Oreana.

The diversified developer, based in Melbourne, which also delivers commercial assets and residential projects, has seen a 136 per cent increase in the Gross Realisation Value (GRV) of its childcare projects, increasing from $234 million in 2023 to $554 million in 2024.

With more than 50 centres in its pipeline and 15 under construction, Oreana’s has further completed the acquisition of more than 17 sites across Melbourne’s growth areas so far this year including Truganina and Clyde North, and secured development approval for another 10 facilities in the state.

It is reporting cap rates at circa 5.5 per cent, reflecting a strong market and appetite from investors attracted by strong fundamentals including long-term leases of generally 15-20 years and options that can take leases up to 40 years.

Oreana Managing Director Tony Sass said Oreana’s childcare expansion was underpinned by the Federal and Victorian Government’s ongoing support for the sector and supported the company’s belief in the importance of early education for Australia’s future.

“The increasing cost of living, along with recently announced additional government support for early education, is resulting in increasing demand for childcare as more women re-enter the workforce or work longer hours,” he said.

“The growth of the sector is providing more employment opportunities, importantly for women returning to work, which are driving our economic growth, while also delivering community benefit.

“Early education drives the future success of our nation by developing our youngest generation. We are increasingly seeing government transitioning the sector from ‘care’ to ‘education’ in recognition of its positive impact on our children and our nation’s future.”

In Victoria, this transition includes free kinder for three and four-year-olds, and four-year-old kinder transitioning to prep, doubling the hours of kinder from 15 to 30 a week by 2032.

Economic analysis shows for every dollar governments invest in preschool, two dollars will be returned to the economy¹. This is a higher return than many infrastructure projects, including the Metro Tunnel that is being constructed with conventional economic benefits of 1:1 and wider economic benefits of 1:5.

Mr Sass said the strength of Oreana’s approach was in its in-house construction, development and a partnership with Aspire Early Education & Kindergarten, which operate all of Oreana’s centres.

“As a developer we understand site identification and are able to work with our partner Aspire to design and deliver quality centres that are successful from the moment they open,” he said.

“We seek to incorporate these centres into our other development activities in growing communities, where we can co-locate them within the local shopping centres and residential housing we are bringing to market. This drives further benefit for new communities by creating convenient hubs for families.”

This approach is illustrated in the success of the partner’s Ramlegh, Clyde North early education facility that was 85 per cent occupied within three months of opening in December 2023. Aspire’s average occupancy rate is 93.4 per cent.

Oreana and Aspire recently opened their first centre in Western Australia, in Baldivis, which received high interest and confirmed occupancy.

One of its other facilities under construction is within the Ashbury estate in Armstrong Creek, where childcare waitlists have blown out locally to up to 18 months. Two months out from its estimated opening and the centre has over 50 per cent of places already committed. Oreana specifically targets growth areas like Armstrong Creek where amenity is required and centres are in demand.

Aspire Early Education & Kindergarten Director Sam Rutecki said early education centres were not just a critical requirement in growing parts of Melbourne, but also played a key role in fostering early community connection.

“As one of Australia’s fastest growing early education providers, Aspire plays a key role in educating our future generations and building community in our local areas,” Mr Rutecki said.

“Childcare extends far beyond just a place where you drop your children when you need to work. It is not only a critical part of a child’s growth and development, but at the heart of community support for a young family.”

“The delivery and management of early learning centres is helping these new areas in Melbourne build connection and develop a sense of community.”