Revealed: The cashed up players making millions from childcare centres
Meet the highflyers making millions from investing in our troubled $20b childcare industry.
Childcare centres have become a massive cash cow for private investors, with owners raking in millions from the asset class that’s regarded as a safe bet.
Among the players who have founded or run ‘for-profit’ centres in the $20 billion industry are football players, haircare brand entrepreneurs, and high-flying property developers living luxurious lifestyles.
Childcare centres have been changing hands in multi-million dollar deals across the country amid new revelations about dangerous practices and regulatory failings across sector.
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One of the latest deals was a Cremorne childcare centre, leased by Only About Children, which sold for $18.5m to a private investor, in what the CBRE selling agent described as part of a trend of “heightened investor interest” in the asset class in the past 18 months.
Last year, a portfolio of seven childcare centres in NSW, leased by Kids Academy, sold for a whopping $55.2m to a real estate investment trust.
Across Australia, childcare centre sales totalled $998.5m in 2024, which was up almost 30 per cent on 2023, but still down 24 per cent compared to peak market activity in 2021, when volumes reached $1.32 billion, according to research from Ray White Group.
There’s clearly money to be made from investing in childcare.
Earlier this year, richlister Brendan McAssey, who made a fortune selling off his childcare business, purchased a $22.5m Noosa holiday home as part of his private Airbnb-style service.
Mr McAssey sold his now 80-strong childcare chain, Only About Children, for circa $400m to Bain Capital, now runs Beluga Charter, an Airbnb-style offering for the wealthy.
He has a stable of properties in Sydney, Melbourne and Noosa, a superyacht G3 which can be based in the Mediterranean, Caribbean or Oceania region with its own chef, masseuse and diving instructor, as well as a VIP seven-seat Agusta 109S Grand helicopter available for guests.
Husband and wife team, Vijay and Phyllis Narula, sold their Perth chain of 14 child care centres to Busy Bees for $40m in 2021.
The designer-clad couple started their Little People’s Places chain of child care centres almost two decades ago after selling their home to fund their dream.
Now they live an opulent lifestyle played out online with pictures of their beachfront mansion, Lamborghinis, and first-class global travels, regularly updated on social media.
Then there’s retired NRL star Josh Reynolds, who is set to become a childcare centre owner after winning a court battle to turn two homes he owns in Sydney’s west into a new daycare facility.
The former NSW State of Origin representative will open a two-storey childcare centre for 70 children in Belmore following his win in the Land and Environment Court just last week.
Reynolds bought 16 Plimsoll St for $630,000 in 2012 and then six years later purchased 14 Plimsoll St for $1.2m.
Also mixing sport with childcare is the deputy chairman of the Greater Western Sydney Giants, who owns Oxanda Education, a leading private provider of early childhood education and kindergarten in Australia.
In 2022, Adrian Fonseca sold 12 childcare centres under Oxanda Education to private equity group, Affinity, in a deal worth more than $40m.
Mr Fonseca hit the headlines in 2023 when he paid $15.6m for a mansion in exclusive Sydney suburb of Bellevue Hill. He had already owned the house next door, which he purchased in 2018 for $14.4m.
He also snapped up a horse-friendly ‘resort-like’ property in Duffys Forest for $14.2m the same year.
PropTrack economist Anne Flaherty said childcare centres attracted a wide buyer pool, ranging from smaller private investors to institutions and real estate investment trusts (REITs).
“It really depends on the location,” Ms Flaherty said. “On paper, childcare assets look like a fantastic (investment), but sometimes when it comes to the operation of these centres, depending on where they’re located, it can be quite difficult getting staff.
Ms Flaherty said that was the case in Sydney’s eastern suburbs where the cost of living was too high for many childcare staff members to afford to live in the area.
“Those areas where we’re seeing strong population growth, where housing is more affordable, demand for childcare is going to continue to grow and that will support the growth of those assets.”
Minderoo Foundation’s Thrive by Five campaign is pushing for more public investment in the early learning sector, citing a report that Australia has the highest proportion of families paying childcare fees to for-profit companies of any OECD country.
Minderoo Foundation’s Jay Weatherill said Australia’s for-profit dominated model would never solve the shortage of childcare and early learning places in outer-suburbs and rural areas.
“Private childcare providers don’t tend to set up in country towns or lower-income suburbs because there’s not as much of a profit to be made there,” Mr Weatherill said.
“That’s why public investment is so crucial, like the $1 billion for 260 new or expanded early learning centres in underserved areas which was announced by the federal government in December.”
According to the report, more than 85 per cent of Australian children attending early learning attend a for-profit service.
“What’s really interesting is that when you look at the countries that have the most affordable and accessible childcare and the highest quality outcomes, they are the ones where it is governments and not-for-profits taking the lead,” he said.
Originally published as Revealed: The cashed up players making millions from childcare centres
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