Running a childcare centre is hard work. But according to new research from CBRE, approved providers who also own their premises are being rewarded with significantly stronger returns than those who lease.

CBRE's March 2026 childcare property report revealed that providers leasing their premises typically generate profit margins of 12% to 22%. Owner-occupiers of similar centres, however, are achieving margins of 15% to 40%.

Why owning can improve performance

The difference comes down to one thing: the cost of rent. For leasing operators, rent can account for a significant portion of revenue, often rising each year through inflation-linked increases. The Australian Taxation Office (ATO) assess rent as typically 8-20% of a childcare centre’s revenue. For approved providers paying that rent to a landlord, it is one of the single largest costs eating into their margins.

By owning the property, that cost is either reduced or redirected into loan repayments, which build equity over time.

Long-term stability in a growing sector

CBRE forecasts demand for childcare places to grow by approximately 11,000 per year through to 2035. As the graph below shows, this could increase 24,000 annually if the new Child Care Subsidy lifts enrolment rates.

 

Owning your premises means you control your location as that demand grows around you, without the risk of lease expiry, relocation or unfavourable renegotiations.

Capturing property growth

As demand grows, well-located childcare centres may also see property values rise. Owner-operators benefit directly from this, building wealth alongside their operating business.

For leasing operators, those benefits go straight to your landlord instead.

More control and flexibility

Leasing means every renovation, expansion or compliance upgrade requires landlord approval. Owners make those decisions on their own terms and on their own timeline.

A stronger long-term position

Owning your childcare centre property transforms the business from an income stream into a long-term wealth vehicle. A combined business and property asset can strengthen borrowing capacity, support future expansion and form a valuable part of a retirement strategy.

While buying your premises isn’t the right move for everyone, the gap in both performance and long-term benefits is becoming harder to ignore. For operators thinking into the future, it may be worth reviewing whether ownership could put you in a stronger position.

If you're still leasing your childcare premises, Ligo Finance can help you understand what ownership could mean for your margins. Contact us today.