Demand for children’s social care properties remains strong as supply still critically low, says Christie & Co
Specialist business property adviser, Christie & Co, has today launched its Business Outlook 2025 report which reflects on the themes, activity and challenges of 2024 and forecasts what 2025 might bring across the sectors in which Christie & Co operates, including in the children’s social care sector.
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Market overview
Throughout 2024, activity in the children’s social care market was moderate, with limited acquisition and business expansion opportunities available to buyers due to many operators holding on to their existing businesses and expanding them where possible to keep up with the increase in demand for children’s services. Amid heightened demand for high-quality operational businesses and well-located vacant properties benefitting from C2 use and CLD, Christie & Co achieved 105 per cent of the asking price on children’s social care transactions in 2024.
While there was a shortage of small to medium-sized businesses being presented for sale, the sector witnessed a handful of major transactions last year. In May, Cap10 Partners partnered with the existing Compass management to acquire 100 per cent of Compass Community Children’s Services (Compass) - a leading UK provider of therapeutic fostering, residential, and special education for children with high acuity and complex needs – from the majority shareholder, Graphite Capital. This significant transaction spanned two key childcare and education markets, notably the children’s social care and SEND education sectors. In the five months following the announcement of this transaction, Graphite Capital, in partnership with Storal, completed the notable acquisition of Children 1st Nurseries, thus further building their appetite and enthusiasm to support growth and investment in the UK’s childcare and education sectors.
Opportunities to acquire established, high-quality operational children’s services business, both single assets and portfolios, have been few and far between in recent years thus leading to intense competition between buyers when new opportunities arise, a trend Christie & Co expects to continue into 2025.
Sentiment
As part of its annual sentiment survey, Christie & Co surveyed childcare and education service providers across the country to gather their views on the year ahead. When asked about their sentiment in 2025, 29 per cent said they feel positive and 31 per cent feel negative, while the majority (40 per cent) felt neutral which illustrates the uncertainty that remains. When asked about their sale and acquisition plans, 62 per cent stated that they are looking to buy and/or sell this year.
Predictions
In 2025, Christie & Co expects:
- Increased merger and acquisition activity
- Continued buyer appetite for quality businesses with proven earnings, especially established businesses with experienced management teams
- Properties with the benefit of permitted C2 or C2a use will continue to command premiums over those sold on a vacant possession basis with C3 use
- With local authority funding shortfalls, Christie & Co fears that commissioning into services at lower cost points could result in children’s individual needs not being met
- Continued stagnation of the market in Wales in the short-term
Julie Kitson, Director at Christie & Co, comments, “2024 was a somewhat frustrating year for the children’s social care sector as so many buyers were looking to acquire and/or expand yet there simply weren’t enough suitable properties to satisfy this demand. Settings continue to be sought-after as demand for placements continues to increase and I see 2025 as the growth year for this sector with the emphasis on SEN and complex needs.”
To read the full business outlook report, visit: https://www.christie.com/news-resources/business-outlook-2025/childcare/
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For further information on this press release, contact:
Phoebe Hill, Associate Director – Corporate Communications
P: 07540 063 598 or E: phoebe.hill@christie.com