Christie and Co Release Annual Report on Nursery Acquisitions
For the past several years, the business property adviser Christie & Co has often been one of the more optimistic voices adjacent to the childcare sector, regularly reporting on the industry’s underlying strengths that make it an attractive market for investors. This year, its annual report sounds a note of caution as the wider economic environment and funding uncertainties impact the sector. Even so, they do predict continued consolidation as nursery groups seek to add new settings to their portfolios.
The reasons for the caution will be familiar to the sector; while demand for childcare remains high among parents, recruitment is an ongoing challenge, with settings unable to expand without sufficient staff. Furthermore, economic factors particularly impact smaller settings, where economies of scale are harder to establish.
Yet, there is apparently still confidence from lenders, with both traditional high street banks and more specialised institutions willing to back the sector. Christie and Co also noted a trend towards leaseholders seeking funding to purchase the freehold of their premises. There is also a tentative confidence emerging in general attitudes, with 44% of respondents to a survey indicating positivity about the future and only 14% negative.
The report also considers the impact of the sustainability agenda, both in terms of construction of new buildings and increasing adoption of renewable energy microgeneration such as solar-panels. This is expected to continue as a trend across the sector.
Christie and Co’s Business Outlook report can be accessed here.