Childcare and Early Learning Centre Valuations in Adelaide

A new purpose-built centre in Mount Barker and a converted villa in Unley are very different assets, but both are valued from the same starting point: what comparable South Australian centres have sold for, tested against the earnings their rooms can sustain.

Childcare centres in Adelaide are normally valued against recent sales of similar centres, because the sector trades often enough to give real evidence. Those sales are expressed per licensed place and as a multiple of earnings, adjusted for the occupancy the centre holds across the year, its quality rating, its lease and any preschool program it delivers, and then checked by capitalising earnings after a salaried centre director replaces a working owner.

What leads Adelaide centre owners to a valuation

Most instructions come from a transaction or a disagreement. A national operator has written to the owners of a centre in Salisbury with an offer nobody asked for. A couple who opened a centre in the southern suburbs together are separating, and the Adelaide registry of the Federal Circuit and Family Court needs the business valued at a fixed date. One of two co-owners of a Prospect centre wants to sell their share to the other. A bank needs a figure before it funds a second site near Mawson Lakes. Or the accountant is moving several centres into a new group structure and the ATO will look for market value.

Plenty of owners also come to us long before selling. The probable buyers are corporate groups and investor syndicates that have modelled hundreds of centres, so a seller without a figure grounded in evidence negotiates from behind. An early valuation also shows what is holding the price down while there is time to act on it: rooms with empty places, a lease nearing its end, a rating sitting at Working Towards, or educator costs pushed up by agency shifts.

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Weighing the evidence for a centre

The Market Approach carries the most weight. Corporate operators, private owners and property investors buy long day care centres around Adelaide regularly, so recorded sales say more about value than a forecast built from scratch.

We use guideline transactions. Each sale is screened for licensed places, occupancy, quality rating, remaining lease, catchment and whether the building sold with the business, then expressed per licensed place and as a multiple of maintainable earnings.

A handful of close matches is worth more than a long list of loose ones. A purpose-built centre on a new long lease in a northern growth estate says little about a small centre in an old bluestone house in Norwood with two years of lease left, even if both sold in the same quarter.

The earnings cross-check

Maintainable earnings are capitalised after the owner's hours in the rooms or the office are costed at a qualified centre director's salary. A centre that only looks profitable because its owner takes no wage is found out at this step.

The asset cross-check

Outdoor play areas, equipment, furniture and fit-out are valued at what they would realise now, and the building is included only if the owner holds it. A freehold is a separate property interest, which investors price on rental yield and operators price on trading.

Adjustments that shift a childcare valuation

Valuations of the same centre usually part company at the normalisation stage, so our reports show each adjustment next to its reason. For childcare centres in Adelaide the usual ones are:

Childcare across Adelaide and South Australia

Where a centre sits in Adelaide changes how buyers read it. The northern growth corridor around Salisbury, Elizabeth and beyond, the southern suburbs toward Seaford, and Mount Barker in the Adelaide Hills are where large purpose-built centres open alongside new housing, usually on long leases to investors, and where a new centre nearby can take enrolments before the estate fills. Established suburbs such as Unley, Burnside, Norwood and Prospect have smaller centres on tight sites, often with long waiting lists. Centres in and around the CBD, near the BioMed City precinct and the Royal Adelaide Hospital, or close to Flinders Medical Centre at Bedford Park, serve working parents and pay higher rents for it.

South Australia adds its own considerations. Services are approved and assessed against the National Quality Standard by the state's regulatory authority for education and care services. Much of the state's preschool is delivered through government preschools, and changes to preschool access, including programs offered within long day care, can alter a centre's room mix, staffing and income. A buyer will want to know what the centre is approved to deliver, whether any preschool program relies on a single qualified early childhood teacher, and how expected policy changes may affect demand. Council development approval can also cap how many children a site may take, whatever the building could hold.

Licensed places are a ceiling, not a result. A centre approved for 90 places that fills 64 is valued on the 64 it can hold, with credit for the gap only where catchment growth and nearby supply make filling it likely. Demand behind the sector keeps building: health care and social assistance, the ABS division that includes child care services, grew its business count by 6.7 per cent nationally in 2025 to 2026, while South Australia added a net 5,613 businesses across all industries (Source: ABS, Counts of Australian Businesses, July 2022 to June 2026, released 18 August 2026). For a seller that means more sales to compare against; for a centre in a growth estate it can also mean a new competitor down the road.

6.7%
national growth in health care and social assistance businesses in 2025 to 2026; child care services belong to this ABS division
Source: ABS, Counts of Australian Businesses, July 2022 to June 2026, released 18 August 2026
2 funders
shape a South Australian centre's income: the Commonwealth through the Child Care Subsidy, and the state through its preschool arrangements
Places filled
rather than places licensed, are what a buyer pays for; the service approval sets only the upper limit

How the report is set out, and why it holds up

The report opens with the purpose of the valuation, the standard of value, the valuation date and the records relied on, with any gaps identified. It then works through each approach considered and the method used, every normalisation adjustment and its reason, and the reconciliation of the results into a range, with the weighting explained in plain English.

When the figure is challenged, the reasoning is what is left standing. A second expert will look first for a choice that is not explained: why sales were preferred to capitalised earnings, or why the centre sits at a particular point among them. That scrutiny arrives in a property settlement in the Adelaide registry of the Federal Circuit and Family Court, or in a dispute between co-owners in the Supreme Court of South Australia, where expert evidence is governed by the court's expert evidence rules. Our reports follow APESB, APES 225 Valuation Services and are signed by a certified valuer ready to defend them.

A question for anyone valuing your centre

Which assumption would an opposing expert attack first, and how would you respond? A valuer who answers immediately has done the work properly.

Choosing the report depth for a centre

An Indicative valuation is a sensible first step when a corporate operator has made contact 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 suits a sale to an unrelated buyer, a co-owner buying in, or a bank funding another centre. A Detailed report is required for a property settlement, a dispute between owners, or any matter where an opposing expert will go through the work.

Let the reader decide the depth. Where a court, a lender, the ATO or another valuer could test the number, the complete reasoning has to be written down.

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

Adelaide childcare owners' valuation questions

Primarily against what comparable South Australian centres have sold for. We shortlist sales of centres with similar licensed places, occupancy, rating, lease and catchment, express them per place and as an earnings multiple, and check the answer by capitalising earnings once a working owner is replaced by a salaried centre director.
No figure per place holds across the whole city. A place in a full centre in Burnside on a long lease is a different asset from a place in a half-empty centre in a new northern estate. The figure depends on how many places stay filled through the year, the daily fee families in that catchment pay, the quality rating, the lease term left and whether the property is included. The report lists the sales relied on and explains where the centre sits among them.
Noticeably, in two ways. Families check the rating when choosing a centre, so it feeds through to occupancy, and a buyer prices the cost of keeping or lifting it. With a Working Towards rating, a buyer usually allows for improvement spending and a slower build in enrolments, and pays less until the service is reassessed.
Only if the engagement covers it, and then as a separate valuation. Investors buy childcare freeholds for the rent and the strength of the tenant, while operators buy the business for its trading. If the owner, a family trust or an SMSF owns the building, the rent in the accounts is replaced with a market rent before the business is valued, so a related-party lease does not skew the result either way.
Certified reports are delivered from seven business days once we have the information. The timing usually depends on how quickly the centre can send three years of financial statements, occupancy by room and week, its service approval and quality rating, the lease, educator rosters and the details of any preschool program it runs.
Only where it turns into enrolments. In an established Adelaide suburb with little new supply, a list that has reliably filled vacancies supports the occupancy figure the multiple is applied to. A list padded with families registered at several centres, or names that never accept an offer, adds nothing, and a careful buyer will ask for the conversion history.
Much of South Australia's preschool is delivered through government preschools, but some long day care centres also run preschool programs, and changes to preschool access can shift demand between rooms and between providers. We confirm what the centre is approved to deliver, whether it depends on one qualified teacher, and how expected changes could affect rooms, staffing and fees. Income from a program is treated as maintainable only if the centre can keep meeting its conditions.
They can. In the fast-growing north, the outer south and around Mount Barker, new purpose-built centres often open before the families arrive to fill them, and a nearby opening can slow enrolments at an existing centre for a year or two. We look at approved and planned centres in the catchment, the centre's occupancy trend since the last nearby opening, and its fees against the newer competition before settling on the occupancy to value.

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 →

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