During 2017 Britain’s childcare property market continued to exceed expectations and deliver asset value growth in excess of forecasts. Demonstrating the resilience of the sector, the growth has come at a time of significant political and macro uncertainty.
Appetite from investors, corporate groups, regional groups and first-time entrants is healthy and at the corporate level the market has witnessed the sale of Magic Nurseries (a group of 16 nurseries) to Les Petits Chaperons Rouges (LPCR) and also the sale of Kiddi Caru (a group of 20 nurseries) also to Les Petits Chaperons Rouges (LPCR).
Overseas investment is being driven by a combination of the excellent reputation of the UK childcare sector and the good value represented by the current weakness of sterling. During 2017 we launched our highly successful online platform businessbuyers.co.uk which was aimed at expanding our buyer reach to a global audience. Through the website statistics we can see strong international buyer appetite particularly focused in Asia and the Middle East.
In addition to the overseas investors we have been actively working with a number of regional and local operators who are pursuing their own ambitious strategies for growth and who can see the opportunities which are arising in the market place. We expect this trend to continue.
Providing evidence of the strength of the market, Redwoods Dowling Kerr have enjoyed success throughout 2017 with both group and single site completions. For 2017 we have seen an outstanding growth of 200% in group completions compared to 2016 and an impressive 30% growth in childcare completions overall compared to 2016. What is even more interesting to note is that of the group completions 50% have sold to regional operators while 40% have sold to new entrants to the childcare market.
The outlook for the UK childcare sector in 2018 is extremely positive and we very much look forward to working with owners throughout the remainder of the year to deliver on their exit and growth strategies.
Redwoods Dowling Kerr have enjoyed success with our Corporate Sales Service in 2017 year which has included the sale of:
- Project Apollo – a Montessori group in London sold to a new entrant
- Project Martha – a nursery in the South West sold to a national group
- Project Cortez – a group of Nurseries in Yorkshire sold to a regional operator.
- Project Honey – a group in the North East of England which sold to a regional operator
- Project Jake – a leasehold nursery in Kent sold to a private equity backed regional operator
We also have a number of corporate sales due to complete H1 of 2018 which include:
- Project Eden – a leasehold nursery in London sold to a regional operator
- Project Daisy – a group of nurseries in the South West sold to an overseas investor
- Project Susie– a group of nurseries in the South West sold to a new entrant
- Project Lilypad – a group in the South West sold to a regional operator
- Project Oliver – a freehold nursery in South East sold to a new entrant