ACT government eases restrictions on land for childcare to stem oversupply

The ACT government is easing restrictions on land earmarked for childcare to help stem an oversupply of centres in Canberra.

The shift in focus follows a period of tightened restrictions on blocks of land being sold for childcare in order to boost the number of places available in the nation’s capital.

Economic Development land policy and strategy deputy director Simon Tennent said the childcare market was “complicated”, but the government was moving away from single-purpose clauses on these sites.

“We read in the paper one day about an oversupply of childcare sites in the ACT and the following week we take a site to the market and it goes for triple the reserve,” he said, speaking at an Australian Property Institute and Real Estate Institute of the ACT State of the Market event last week.

“We will continue to identify sites for childcare but we will more than likely start to add additional lease purposes to the land in acknowledgment that the market really is now starting to demonstrate that there is an oversupply.

“We are going to get away from single-purpose clauses for childcare and start to add other uses just in case.”

The ACT government received 11 applications for the development of childcare centres in the ACT in the first half of 2016, with four seeking to vary the land’s Crown lease to add the use of a childcare centre.

Most applications lodged were for sites in Tuggeranong including Conder, Chisholm, Kambah, Richardson and Gordon.

Other suburbs included Weston and Coombs on the south side and Belconnen, Higgins, Mitchell, and Gungahlin in the north.

Childcare centres have become a sought-after investment in the ACT with high yields and the city’s population growth driving record sales and attracting interest from interstate.

In March the ACT government sold a childcare site in Higgins for a record $2,605,000 at auction, with 145 bidders vying for the block.

But the closure of the Fyshwick Early Childhood Centre in June sparked calls for a broad strategy to better target where childcare centres should be allowed to open in the ACT, amid fears there may be too many places in at least some parts of the territory.

Granting community facility leases with multiple purposes – such as childcare, aged care and community facilities – is not new.

Land Development Agency chief executive David Dawes said the government had restricted some leases to just childcare in recent years to increase the availability of places in the territory.

“The success of this policy in increasing the availability of childcare has reduced the need to restrict future leases,” he said.

“The type of lease for each community site is determined on its merits and includes consideration of the community’s needs.”

Mr Dawes said community leases with multiple purposes offered flexibility and allowed the government to “accommodate the changing needs of the community into the future”.

More than 130,000 square metres of community, non-urban land is set to be released during the next financial year as part of the ACT government’s 2016-17 land release program. Two sites in Curtin and Charnwood have been earmarked for childcare.

Mr Tennent said community land had become “the most desired” in the ACT, with sites also being released for various types of aged care and, for the first time, non-government schools.

– with Rachel Packham