Property Market Analysis Report: 7MADE Company, Blacktown

This report presents a property market analysis for a proposed childcare centre development in Blacktown. The study investigates the local demographics, including the population of preschool-aged children, couple families, and household incomes, to assess market feasibility. Key findings reveal an increasing population of preschool children in Blacktown, exceeding state and national averages, alongside a high percentage of families with disposable income. The analysis also considers the selection of companies for project implementation, including surveyors, valuers, building contractors, and project managers. Financial projections indicate a substantial profit margin based on the total development cost versus the project's estimated value. The report concludes with a recommendation to proceed with the childcare centre development, emphasizing the favorable market conditions and the potential for high profitability. It also includes recommendations for securing approvals, implementing modern architectural elements, ensuring safety, securing funding, and developing a comprehensive marketing strategy to maximize the centre's success.

Property Market Analysis 1
PROPERTY MARKET ANALYSIS
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Property Market Analysis 2
Table of Contents
1. Introduction.......................................................................................................................................3
2. Findings..............................................................................................................................................3
2.1. Population of pre-school aged children....................................................................................3
2.2. Couple families and household income....................................................................................4
2.3. Companies selected....................................................................................................................5
2.4. Cost and profit...........................................................................................................................5
3. Conclusion..........................................................................................................................................6
4. Recommendations..............................................................................................................................8
References................................................................................................................................................10

Property Market Analysis 3
1. Introduction
This report presents findings from the target market feasibility study conducted on
Blacktown – the potential site outside the metropolitan area for a new development project. The
findings will help the development manager to make an informed decision on whether to proceed
with the proposed child care centre in this new market – Blacktown area.
2. Findings
2.1. Population of pre-school aged children
According to ABS Census, the number of children aged 0-4 years in Blacktown has
increased by about 6%, from 25,416 in 2011 to 26,928 in 2016, as shown in Figure 1 below. This
age group represents 8% of Blacktown population compared to 6.2% and 6.3% of New South
Wales (NSW) and Australia population respectively (Australian Bureau of Statistics, 2018). This
shows that the population of pre-school aged children in Blacktown is higher compared to the
national figure and has been increasing gradually over the years thus presenting an opportunity
for provision of child care services.

Property Market Analysis 4
24500
25000
25500
26000
26500
27000
27500
25416
26928
Population of pre-school aged children
2011 2016
Year
Population
Figure 1: Population of pre-school aged children in Blacktown in 2011 and 2016
2.2. Couple families and household income
Out of the 26,928 pre-school aged children in Blacktown, only 6,398 children (23.8%)
are attending pre-school, meaning that 20,530 children (76.2%) are not attending pre-school.
This is illustrated in Figure 2 below. Couple families with children account for 51.2% of
Blacktown population compared to 45.7% and 44.7% of NSW and Australia population
respectively. 27.1% of couple families with children are dual income households where both
parents are working fulltime while only 2.9% work part time. 83.5% of families have a working
parent and the median weekly income per household is $1,817 in Blacktown compared to $1,780
in NSW. The median weekly mortgage repayment in Blacktown is $450 while the medium
weekly rent is $380. Also, 84.3% and 91.6% of households in Blacktown have their median
weekly rent payments and mortgage repayments being 30% below their income. This means that
couple families with children in Blacktown have substantial disposable income they can use to
take their children to pre-schools.

Property Market Analysis 5
6398; 24%
20530; 76%
Children attending/not-attending re-school
Attending Not-attending
Figure 2: Number of children attending/not-attending pre-school
2.3. Companies selected
Several companies have also been selected to provide different services to ensure that the
project is implemented successfully. The selection of these companies was based on their
qualifications. These companies include the following: Delta Surveying Services – surveyor,
Richard & Associate Valuers – valuer, Michael Parr Construction – building contractor, Peter
Young Associates – project manager, George Woodland Architect – architect, and William
Carter Sale Agency – sales agent.
2.4. Cost and profit
After carrying out relevant calculations of land cost, construction cost and valuation, the
total development cost of the proposed child care centre project is $8,088,952 while the total
value of the project is $14,200,000. There is a reasonable gap between the two as illustrated in
Figure 3 below. This means that if the project is implemented as planned, it will generate a profit
of about $6,111.048.

Property Market Analysis 6
Development cost Value
0
2000000
4000000
6000000
8000000
10000000
12000000
14000000
16000000
Comparison of cost and value of the deveopment
$
Figure 3: Development cost and value of the project
However, realization of this profit will depend or can be affected by different factors
including: interest rate fluctuation, establishment of other child care centres in the area, delayed
approval or rejection of the project, construction delay caused by delayed delivery of building
materials or bad weather, disputes between parties, liquidation of any company involved in
implementing the project, inadequate funding, and occurrence of natural disasters.
3. Conclusion
One of the key factors to consider when planning for a child care centre development
project is the population of people living in the area particularly the number of pre-school aged
children. The total Blacktown population has been increasing gradually over the years and so has
the number of pre-school aged children (0-4 years). The number of couple families with children
is also more than half the total population in Blacktown. The population of couple families with
children and the number of re-school aged children in Blacktown is expected to increase in the

Property Market Analysis 7
coming years thus presenting a good opportunity for the development of a child care centre in the
area.
It has been found that only 24% of pre-school aged children in Blacktown are attending
pre-school while the remaining 76% are out of school. One of the possible reasons for the high
number of children that are not attending pre-school is lack of adequate or state-of-the-art child
care facilities in Blacktown. This means that there are high chances that a new child care centre
in the area will be fully utilized. However, these is also the possibility that the child care centers
available do not offer quality services or parents in the area have not been sensitized about the
benefits of taking their children to child care centres. Sensitization increases the utilization rate
of child care centres (Ismail, et al., 2018).
Majority of parents in Blacktown are working either fulltime or part time. Some families
are dual income households while in other families, only one parent is working. Looking at the
average household weekly income ($1,817), rent payment ($380) and mortgage repayment
($450) in Blacktown, many parents have adequate disposable income to take their children to
pre-school. Taking children to a child care centre will also give parents adequate time to carry
out their chores and also improve children’s cognitive and socio-emotional development
(Helmerhorst, et al., 2017).
The total development cost of the proposed child care centre is $8,088,952 (including
land cost and construction cost) whereas the total value of the project after one year of operation
is $14,200,000. This means that one year after official opening of the proposed child care centre,
the company will make a profit of $6,111,048. This is good profit for the company and it will
enable the company to repay any loans it may have borrowed to develop the project.

Property Market Analysis 8
Therefore based on the statistics about the number of couple families with children, pre-
school aged children, average household income and disposable income per family, there is great
opportunity for a child care centre development project in Blacktown. This is a suburb outside
the city and its characteristics are suitable for development of a child care centre. The main
parameters that determine profitability of a child care centre are the number of pre-school aged
children, household income, location of the child care centre, quality of services offered, and the
general economic growth in the area. All these factors are in favor of a child care centre
development in Blacktown. For this reason, it will be a wise decision for the company to enter
Blacktown market and develop a child care centre.
4. Recommendations
 The company should go ahead and enter the Blacktown market by developing the
proposed three-story child care center. The area presents a very good and profitable
business opportunity for child care centre development.
 The company should get all necessary approvals from relevant authorities and ensure that
all development activities are done by qualified and certified professionals.
 The child care centre must have modern architectural elements to be eye-catching with
state-of-the-art facilities to guarantee safety of children and quality of services offers.
This will attract more parents to take their children to the child care centre (Keys, et al.,
2013).
 Both indoor and outdoor facilities should guarantee children’s safety and enable them
engage in various physical activities without any limit (Coleman & Dyment, 2013).
 The company should get adequate resources to ensure that the project is fully financed to
prevent delays when construction activities start.

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 The company should develop a comprehensive marketing strategy that will ensure all
parents in the area are reached and informed about the new child care centre and the
benefits of taking their children there.
 Once the child care centre starts operating, the company must ensure that they offer high
quality professional services. This will give them a competitive advantage over its
competitors in the area and increase utilization ratio of the child care centre and profit for
the company (Workman & Ullrich, 2017).
 The company should develop programs or strategies that will make them more
competitive in the region. This may include picking and dropping children to their
homes, and giving incentives or bonuses to parents who refer their friends or relatives to
the institution, among others.
 The company should also focus on sustainable construction and operation of the child
care centre. This will help to reduce lifecycle costs and increase profit for the company.

Property Market Analysis 10
References
Australian Bureau of Statistics, 2018. 2016 Census QuickStats. [Online]
Available at: http://quickstats.censusdata.abs.gov.au/census_services/getproduct/census/2016/
quickstat/LGA10750?opendocument
[Accessed 26 March 2019].
Coleman, B. & Dyment, J., 2013. Factors that limit and enable preschool-aged children’s physical activity
on child care centre playgrounds. Journal of Early Childhood Research, 11(3), pp. 203-221.
Helmerhorst, K.O.W; Fukkink, R.G; Riksen-Walraven, J.M.A; Deynoot-Schaub, M.J.J.M. & Tavecchio,
L.W.C., 2017. Improving quality of the child care environment through a consultancy programme for
centre directors. International Journal of Early Years Education, 25(4), pp. 361-378.
Ismail, L., Hindawi, H., Awamleh, W. & Alawamleh, M., 2018. The key to successful management of child
care centres in Jordan. International Journal of Child Care and Education Policy, 12(3), pp. 1-12.
Keys, T.D; Farkas, G; Burchinal, M.R; Duncan, G.J; Vandell, D.L; Li, W; Ruzek, E.A. & Howes, C., 2013.
Preschool Center Quality and School Readiness: Quality Effects and Variation by Demographic and Child
Characteristics. Child Development, 84(4), pp. 1171-1190.
Workman, S. & Ullrich, R., 2017. Quality 101: Identifying the Core Components of a High-Quality Early
Childhood Program. [Online]
Available at: https://www.americanprogress.org/issues/early-childhood/reports/2017/02/13/414939/
quality-101-identifying-the-core-components-of-a-high-quality-early-childhood-program/
[Accessed 27 March 2019].