Location is often front and centre in property investment discussions. For childcare centre owner operators, it can also be one of the most important factors when deciding whether to buy your own premises.

According to CBRE, there are 0.47 approved childcare places for every child aged 0-5 in Australia. But that national average masks huge variation at the suburb level.

Across 1,090 locations analysed by CBRE, some areas have ratios as high as 0.69, while others sit as low as 0.31. In practical terms, this means that in some suburbs, fewer than one in three children have access to a local childcare place.

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What a low supply ratio means for your business

For operators running centres inundersupplied areas, this often translates into persistent waitlists and strongoccupancy rates, which can provide greater business stability over time. Whenlocal demand consistently exceeds supply, operators can have more confidence intheir fee structures and face less pressure to discount or compete on price tomaintain enrolments.

There is also typically less risk of acompetitor opening nearby and drawing enrolments away, because new supply inalready underserved areas is difficult to justify without governmentintervention.

The risk for operators who are still leasing

Despite these business benefits, there may be a limit to how much you can capitalise on them if you do not own the premises. Landlords in high-demand areas understand the value of what they hold, and rent reviews tend to reflect that. The very factors that make your centre successful, such as limited local supply, strong enrolments and reliable occupancy, can also strengthen your landlord’s position at renewal time.

Why ownership compounds overtime

Buying your premises changes the equation. An owner-operator in an undersupplied area holds a compounding asset, where the property value is underpinned not just by the real estate itself, but by the structural demand for the service it houses. As surrounding areas grow, infrastructure improves and population density increases, both the business and the property can appreciate together. The location that makes the centre valuable today has the potential to become even more valuable over time. And as an owner, you capture that upside rather than paying it to someone else.

Many childcare operators spend years building a strong centre in a great location, then hand that value back to a landlord at every lease renewal. Ownership is how you stop doing that.

If you operate in a high-demand area and are still leasing your premises, Ligo Finance can help you understand what ownership could look like for your business. Contact us today.