Almost $300 million worth of childcare centres changed hands in the year to June 2017, a threefold increase on the previous year, as growing population rates and government policies drive both the development and sales of new centres.

In August, four centres sold for a combined $44.9 million on yields ranging from 4.2 per cent to 5.59 per cent. One of those, a Nino Early Learning Adventures centre under development in East Malvern, fetched $16.9 million, the highest price achieved for a childcare centre, on a yield of 4.2 per cent.

The number of childcare centres has grown 24 per cent in the past five years, according to research by Colliers International, with about 18,000 childcare services attending to approximately 1.3 million children - a figure that increased 1.5 per cent between late 2015 and 2016.

Paul Mondo from the Australian Childcare Alliance warned there was danger of over supply in the market which could erode the fundamentals underpinning yields.

"It's a flawed methodology. There are very few centres running at 100 per cent capacity and the rents are based on the number of licensed places," Mr Mondo said.

"You can control staffing costs based on the number of children in the centre, but you won't be able to control the rent," he said.

While there might be some unease about oversupply and the potential for government policies to change the fundamentals underpinning the sector, others are more sanguine.

Colliers International's manager of childcare centre valuations, Dylan Adams, said the main driver is the 20-year lease covenants offered in the sector.

"It's becoming a more vanilla investment asset. It's more weighted towards the tenant and the 20-year lease terms. They can just buy an asset and sit on it for 20 years. That's the real driver behind the yield compression," Mr Adams said.

Data from Colliers International show childcare centre yields have contracted steadily to an average of just below 5.25 per cent in the year to date, down from 7 per cent 2013-14. A 56-place Kensington Kinder Haven in New South Wales sold for $5.95 million on a 4.13 per cent yield.

CBRE agent Scott Orchard said childcare properties had long been an undervalued asset class.

"Interest has also been stimulated by the federal government's intention to invest around $37 billion on childcare support over the next four years," Mr Orchard said.

"The sector is now a crucial community service and operators are not as susceptible to discretionary spending patterns."

CBRE is selling a clutch of centres at a portfolio auction next Thursday. Three of the four centres are under development or construction by the Agosta family's Nino Early Learning Adventures, one of the most active developer-operators in the sector.

The three centres in Bundoora, Ashburton and Mickleham boast 20-year leases, 10-year options and fixed annual rent review. While the Bundoora centre is due to open next month, the Mickleham centre is under construction and the Ashburton centre will be sold off the plan with a long-term settlement.

The fourth centre on offer, in Point Cook, is leased to Guardian Early Learning on a 12-year lease with two 10-year options.

CBRE agent Josh Twelftree said: "In addition to the long leases, attractive depreciation benefits and strong revenues, which support sustainable rents, are the other reasons why investors are looking closely at the sector."

Agents Teska Carson are also marketing a fully-leased childcare centre for sale in Mornington.

The "entry level" centre at 18-20 Fleet Street has a five-year lease, returning $58,000 a year with 4 per cent annual rent increases.

Teska Carson's Fergus Evans said the centre was strategically located between the industrial/services part of town and the retail strip.