LaingBuisson has launched the 14th edition of its Childcare UK Market Report which focuses on the nurseries market.
There are 4.9 million children aged five or under in the UK today, 17% of whom are in formal nursery education, with demand growing year-on-year. This is driven by more mothers of young children working (70% of them with children under 4 in 2017) and by growing recognition of the positive role that receiving the right education during early years has on child development.
While the market still has a ‘long tail’ of small providers, the growth in popularity of formal childcare is increasing demand for nursery places, attracting investment in the sector, and driving consolidation, there are now two ‘supergroups’ and around 23 mid-small sized groups. A number of investors and providers from North America, Asia and Europe have entered the market, among them Les Petits Chaperons Rouges, the number two in France and now number seven in the UK market, Ontario Teachers’ Pension Plan (“OTPP”) and Temasek, the National Government of Singapore’s investment fund.
The market is not, however, without its challenges. Other successful markets like France, have experienced similar challenges but operators have successfully adapted to them and moved forward providing stronger businesses, offering better care and support for children, parents and staff.
Dominic Barrett-Evans, report author, said:
“All of the indicators point to formal day care services for children under the age of 5 being attractive for investors taking a long-term approach and with a willingness to evaluate each acquisition on its own merits. With many more mothers of young children working and parents recognising the value of good early years education and care, childcare has now become a vital part of everyday life and this will only continue to grow. We expect continued steady growth, with increased demand for more specialised childcare services and eco-nurseries providing operators with innovative, practical and cost-effective solutions to extend capacity if needed.
“Moreover, the childcare sector has shown its resilience in the face of economic downturns and Government policy changes over the years, and a very real opportunity exists if the Government settles on the correct childcare strategy soon. It is too early to judge the impact of most recent ‘30 hours policy’ but it is likely that operators will be able to adapt and find solutions to make it work. Getting the funding right is also fundamental to making sure well-trained and good-quality staff continue to be attracted to the sector.”
For more information on the report click here