Childcare reframed as essential infrastructure by Jarra Childcare Trust and InvestmentMarkets
Australia’s childcare sector has long been seen as a social service, but increasingly it is being recognised for what it also represents: critical economic infrastructure. As Mike Cameron, Commercial Director at Jarra Childcare Trust, points out, “Childcare is here to stay. We all need to work to provide for our families. It’s critical for labour force participation at an economic level and it contributes to GDP.”
This combination of social importance and economic multiplier effect makes childcare one of the most defensive and resilient investment classes in the country. Few sectors can claim more than three decades of bipartisan government support, something Cameron describes as “quite unique” in the Australian landscape.
Despite its scale, the childcare industry remains highly fragmented. The top five providers account for less than 20% of supply, and more than a third of centres are still single-operator, family-run businesses. For investors, this presents both challenges and opportunities.
“Typically, poor performing businesses start with poor site selection,” Cameron explains. “Childcare is a deeply localised investment. Demand depends on catchment demographics, traffic flow, and convenience for parents. Get those fundamentals wrong, and the centre struggles. Get them right, and you have a quality asset that performs irrespective of market conditions.”
This bottom-up, quality-first approach is the throughline in Cameron’s investment philosophy. “The number one lesson across sectors is always the same - invest in quality,” he says.
Childcare investments span both property and operating businesses, and Jarra has experience across both. Cameron argues that controlling both sides of the equation, site selection and operational oversight helps reduce risk while aligning incentives between landlords, tenants, and financiers.
“We set businesses up to succeed by making sure they’re in the right locations, with operational oversight to maintain quality learning environments,” he says. “It’s not just about cashflow; it’s about trust. Parents entrust childcare providers with the most important thing in their lives - the wellbeing of their children.”
Recent scrutiny of childcare standards has put the sector under pressure, but Cameron welcomes the shift. “What I’ve read in the newspaper over the past few months has been nothing short of harrowing and let’s be honest unacceptable. Any investment thesis into childcare has to prioritise quality of care. I fully support more regulation to improve standards across the board.”
With rising public expectations, the winners in this sector will be those who place children and families at the centre of their model, creating both positive social outcomes and long-term investment value.
Darren Connolly, CEO of InvestmentMarkets, notes that investors are paying attention. “Childcare is increasingly being recognised as an essential infrastructure asset - like healthcare, energy or transport - but with the added advantage of consistent government backing,” he says. “For self-directed investors, that combination of resilience, demand certainty and bipartisan policy support makes it an asset class worth considering.”
Connolly also highlights the importance of transparency for investors. “We encourage investors to compare childcare alongside other asset classes, not just in terms of returns, but in terms of risk management, governance and alignment between stakeholders.”
This growing focus on transparency and governance means investors and operators are now being measured not only on financial returns, but on their ability to provide stability, accountability and centres that genuinely meet the needs of families.
For Cameron, the future is about building a quality network of centres across the country. “It’s not about scale for scale’s sake,” he says. “It’s about creating positive learning environments, delivering quality outcomes, and building a portfolio that will stand the test of time.” For more information visit www.investmentmarkets.com.au/podcasts