Day Nurseries Market Insight 2026: London and the South East

Image: Robert Tudor for Unsplash

The London and South East market continues to offer a varied mix of opportunities, ranging from single-site owner-operated nurseries and pre-schools through to larger multi-setting groups. We are seeing a greater volume of quality assets entering the market compared with previous years, as operators who delayed exit plans during periods of economic uncertainty are now returning to market. 

A notable proportion of this activity is being driven by long-standing nursery and pre-school owners who are approaching retirement or are now ready to execute exit strategies that may have been postponed in recent years. Combined with ongoing changes across the sector, including funding reforms, staffing challenges, and increasing operating costs, many operators are taking the opportunity to assess their long-term plans and bring their businesses to market. 

Stock remains particularly strong across Greater London, the Home Counties, and the wider South, with a healthy proportion of both freehold and leasehold opportunities. We are also seeing a steady flow of pre-school settings entering the market, particularly committee-run and owner-managed settings operating from community, church, and village hall premises, where succession planning and retirement are key drivers. 

Demand remains strongest for high-performing settings with occupancy above 80%, stable management structures, and strong local reputations. However, well-established nurseries and pre-schools with clear opportunities for growth continue to attract interest from buyers looking to expand their footprint across the region. 

BUYER APPETITE  

Buyer appetite remains robust across London and the South East, despite wider economic challenges. Strategic trade buyers continue to dominate activity, particularly established groups seeking bolt-on acquisitions to strengthen existing clusters, such as Happy Days Nurseries’ purchase of the 334-place portfolio of four settings, Boys & Girls Nursery, in April, and Kido School’s acquisition of 269-place Advantage Day Nursery in Surbiton in June. 

Private equity-backed operators also remain active, targeting high-quality settings that can support wider platform growth strategies. A good example was the sale of the reputable 67-place Kingswood Day Care Nursery in Mitcham to Storal, taking its portfolio to 61 nurseries across the UK.   

At the same time, we are seeing renewed interest from smaller regional operators and experienced first-time entrants looking to acquire established businesses with clear operational upside. For example, the sale of Brick by Brick Pre-School in Beckenham – an ‘Outstanding’ rated, 40-place setting - sold to first-time buyers, a husband-and-wife duo, Sajid Mehmood and Aroma Naz, earlier in the year.  

Buyers are increasingly focused on areas with favourable demographic trends, strong household incomes and ongoing housing development. Locations across the M25 commuter belt, affluent Home Counties towns and densely populated London boroughs continue to attract significant interest. However, demand is not limited to prime locations, as well-run nurseries in secondary markets continue to generate competitive buyer interest where occupancy, staffing stability and profitability are demonstrably strong. 

POSITIVES & CHALLENGES IN THE MARKET 

One of the main positives in the market is the resilience of demand for childcare. Continued government support for funded childcare places is helping to maintain confidence in the long-term fundamentals of the sector and encouraging acquisitive operators to pursue growth. 

The biggest challenges remain operational rather than transactional, with the recruitment and retention of qualified staff continuing to affect many operators across London and the South East, while rising employment costs place pressure on margins. Buyers are therefore undertaking increasingly detailed due diligence around staffing structures, wage inflation, and workforce sustainability. 

Property-related costs also remain a consideration, particularly in London, where rent reviews, business rates and occupancy costs can significantly impact profitability. As a result, buyers are placing greater emphasis on earnings quality and future maintainable profits rather than headline turnover alone. 

In addition, we are seeing due diligence processes become more thorough than ever before. Buyers increasingly expect access to up-to-date occupancy data, current management information, and detailed financial reporting, rather than relying solely on historic accounts. Sellers who can readily provide accurate occupancy trends, current-year performance figures, and forward-looking projections are often better positioned to instil confidence, maintain momentum throughout the process, and ultimately achieve stronger outcomes. For operators considering an exit, ensuring that financial and operational information is current and readily available has become an important part of sale preparation. 

KEY REGIONAL TRENDS 

A noticeable trend is the flight towards quality. Buyers remain highly acquisitive but are increasingly selective, favouring businesses that demonstrate strong occupancy, experienced management teams and clear compliance records. 

We are also seeing continued consolidation across the sector, with larger operators seeking acquisitions that complement existing geographic coverage, generate operational efficiencies, and strengthen market share within established regions. 

Another emerging trend is the growing importance of management infrastructure. Nurseries that can operate with limited day-to-day owner involvement often attract stronger buyer interest and more competitive pricing than owner-dependent businesses. 

Additionally, sellers are becoming more aware of the importance of exit preparation. Businesses presenting robust financial information, documented procedures and clear growth narratives are achieving better market engagement and smoother transactions. 

ADVICE FOR OPERATORS LOOKING TO SELL IN THE REGION 

One of the key messages I'd share with operators is that it's never too early to start planning. Some of our best processes are the result of careful preparation, allowing time to strengthen occupancy, review staffing structures, improve reporting, and present the business in the best possible light. Whether you're considering a sale in the near future or simply want to understand what your business might be worth, having an early conversation with your local sector-specialist adviser can provide valuable insight and help you put a clear plan in place for the future. 

To discuss the market in London and the South East, get in touch with Sam: sam.brooks@christie.com or 07355 626 551