Day Nursery Market Insight: Yorkshire & North East

Image: James Genchi, Unsplash

What’s happening in the day nursery market?

There are more opportunities in the Yorkshire and North East day nursery market than ever before.

As the pandemic has brought about heightened appreciation for early years education, we’re seeing appetite from a lot of existing operators keen to grow their portfolios in this key, frontline sector, this includes smaller, local, and regional group operators (typically of between one and four settings) who have come out of the pandemic strong and so banks see great potential so are keen to finance their growth. There is also an increase in interest from investors wanting to enter the sector and create small portfolios, because they’ve seen how well it has performed through the pandemic and the clear demand for childcare services.

A highly competitive market at the moment may result in first-time buyers struggling to compete with experienced buyers for high-quality settings. The key there, if you are looking to enter the market, as so many are at present, is to really do your research and ensure you are aware of what the job entails – this will boost your chances of obtaining a nursery and make your offer more appealing. For more buyer’s tips, click here.

Going forward, with those born in the pandemic ‘baby boom’ almost reaching nursery age, and more parents throughout the North returning to office working, demand for nurseries and their services is likely to increase further.

What are buyers looking for?

High-quality assets are in demand, as always, but stock of such settings is low at the moment so we’re seeing a really competitive market.

Buyers are interested in both freehold and leasehold settings, dependent on their budget and the speed at which they plan to expand, as those looking to grow quickly might prefer leasehold for flexibility of purchase.

Well maintained properties with a neutral design and free flow access to good outside space is still vital, forestry-style space is ideal. For staff’s mental health and wellbeing, separate staff rooms are great. Many settings are now moving towards using a lot of natural resources, and we expect this to become more of a focus as time passes.

Where are buyers looking?

Buyers are looking for settings in a range of locations from village nurseries to affluent areas on commuter links to city centres – it often depends on personal logistics and what works for the buyer and, often, where the rest of their group is if they’re an existing operator. Pandemic-related restrictions changed demand for nurseries, but this is going back now as people return to work. Settings in cities continue to be very popular and this is likely to remain the case.

What’s coming up in the area?

We have lots of deals in the pipeline at the moment, with settings being purchased by a range of buyers, from first-time owners, to expanding small regional groups and corporate buyers. Going forward, we’re hoping for more quality assets coming to market in order to satisfy demand.

To find out more about the day nursery market in Yorkshire and the North East, or for a confidential chat about your business, contact Vicky Marsland: vicky.marsland@christie.com / +44 7526 175 857