Childcare businesses for sale
Trends in the regions
From a regional perspective, the impact of increases to National Minimum Wage, introduction of the Living Wage, together with increases in Business Rates and the introduction of 30 hours from September 2017, have created some tensions in some parts of the country, but not enough to dim the demand for nurseries and childcare businesses.
We have continued to sell a varied spectrum of childcare businesses from freehold and leasehold day nurseries, children’s homes, play centers and out-of-school clubs, and activity has increased significantly during this year. Banks are not only supportive but actively encouraging their customers to expand, via acquisitions and organic developments.
London and the South
Once again, London and its surrounding areas have proved to be a hotspot for childcare activity. In London in particular, no doubt as a result of a lack of D1 availability, we are seeing huge demand from a plethora of prospective buyers, whether they are first time cash rich buyers, investors, corporate chains or smaller existing operators looking to expand. This demand is for a variety of assets, from empty D1 spaces through to larger portfolio acquisitions and prices have been driven upwards due to the lack of supply. This has created an environment in the capital, where each opportunity that comes to the market receives a tremendous amount of interest, sometimes regardless of its profitability or security of tenure.
Again the picture is much the same in the South with small group operators looking to expand as access to funding for experienced operators in particular has become easier. In the Midlands and Anglia regions the market is also buoyant with first time buyers taking on the challenge of owning their first run settings aided by the banks appetite to fund newcomers with prior experiences gained from other business sectors.
We have seen a sharp growth in buyers looking at key areas across the Midlands particularly in the first quarter of 2019. This comes off the back of a busy 2018 for transactions and the additional services Christie & Co provides to operators. The majority of buyers we speak to are seeking finance to purchase a day nursery, and our sister company Christie Finance helped finance several deals last year, and we see this continuing due to the increase in demand from both first time and experienced operators.
The Midland’s has a diverse location offering, from busy city settings to areas of natural beauty, so we see a whole mix of buyers looking for either the opportunity of relocation into a beautiful lifestyle business, to those experienced operators and corporate chains looking to boost their share of the market within the urban areas.
North, Yorkshire & North East
We have recently seen a variation of instructions come to market; 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. The fast pace in which the North children’s day nursery market is moving has been surprising and we like to think has given its equivalent in the South a run for its money. This exciting activity displays 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.
Over the last 18 months the market in Scotland has improved significantly with competitive closing dates and increased transactional activity further boosted by the return of corporate activity.
The market within Wales is also becoming more active with increasing interest from buyers and new investors as new policies develop. The newly implemented Taking Wales Forward Policy commits the Welsh Government to providing 30 hours a week of government-funded early education and childcare for working parents of three and four year olds, for up to 48 weeks of the year, with adequate funding rates to ensure sustainability, nationwide implementation across Wales would be a positive development, for parents and providers alike.
What we can offer you
Our Regional Childcare & Education team includes 30 Chartered Surveyors, along with specialist Business Agents and Consultants located across the UK. All of our chartered surveyors are RICS registered valuers with experience in the Childcare & Education sector.
As well as providing valuation advice, our team has experience in business rates, consultancy, development, and landlord and tenant including: rent reviews, lease renewals, expert witness and dispute resolution. Within our team we have a wealth of knowledge and experience which allows us to provide sound and reasoned advice.