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02 June 2017 | Childcare & Education

It's busy up north in the childcare market

Whilst there is always a lot of discussion over how busy and popular the London and South East of the country are for people looking to acquire children’s day nurseries, it should be noted that the North of the country is not that far behind.

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The demand for high quality settings is at an all time high which has resulted in some exceptional prices being achieved. This is being fuelled by existing operators looking to consolidate and acquire competitors and looking to expand into new areas. We have also seen increased activity from first time entrants to the market looking to diversify from professional trades such as doctors or dentists.
 
In addition to private operators we have also seen some major acquisitions from some of the corporate operators in the sector. With Treetops (now owned by Busy Bees) acquiring Kindercare, a Yorkshire based company and the recent acquisition of Kids 1st.
 
Operators have realised that whilst fees may not quite be as high in all parts of the North, for a premium product you are able to have comparative prices to that of the South with the added bonus that real estate prices are not as high.
 
Generally here in the North, the time from which a vendor instructs us to sell his or her nursery, to the point when a successful buyer is found, usually depends on the level of demand for the opportunity itself and its key selling points.
 
For your average nursery purchaser the most popular tick boxes are:
 
  • Affluent location
  • Operating capacity 60+
  • Spacious outdoor play facilities
  • ‘Outstanding’ with OFSTED
  • Premium nursery fees
  • Ample private parking
 
If a nursery is introduced to the market and is fortunate enough to include all of the above, then the level and speed of interest received will be high, generally leading to a deal agreed very early on in the process.
 
This year however, we’ve been pleasantly surprised to find that childcare settings with none of the above have been snapped up just as quickly.
 
The North Childcare team at Christie & Co has recently seen a variation of instructions come to market. These include profitable businesses, loss making businesses, freeholds settings, leaseholds settings, new leases on vacant premises, former pubs, out of school clubs, large unused sites of land... You name it, we’ve had it!
 
As we approach the middle of 2017, we can reflect on the numerous offers which have been accepted on these instructions which are now well on their way to completion. The fast pace in which the North children’s day nursery market is moving has been surprising, and we like to think it has given its equivalent in the South a run for its money.
 
This activity demonstrates that there is a buyer for every opportunity and beauty really is in the eye of the beholder. So if you have been thinking of a possible future exit strategy, and were apprehensive about whether your business would seem attractive to a buyer, it really is worth looking it further and having a chat with us.
 
As we have seen recently, several major businesses are relocating from London to Manchester (the BBC to name one) and the continued demand for high quality childcare in this part of the country is set to continue.
 
With a recent successful debut show this month in Liverpool, Nursery World North 2017 was a must attend event for all those who work in the early years community and it proved to be a great turnout not for just Northern nursery operators, but also for those based in the South.
 
Christie & Co is also excited to host a stand (A-20) for the second year running at the Childcare Expo Manchester 2017 in Event City, where you can visit us for some free business advice or just a general chat.
 
Childcare Associate Director, Nick Brown will also be holding a seminar at the Expo on Friday 16th June where he will review some of the most notable events of 2016 including Brexit, NLW and the impact of these over the past 12 months on the UK day nursery sector.  
 
With the nursery market landscape changing, he will discuss how nursery owners best position themselves when seeking capital from a bank to expand, or alternatively when thinking of retirement plans.
 
For your free ticket to the Manchester Childcare Expo just visit www.childcareexpo.co.uk/manchester/seminars-manchester/