Hello, my name is Sophie Hailey and I work at Monkey Puzzle Head Office as Franchising and Property Acquisitions Associate. I have worked at Monkey Puzzle since July 2019 and have managed the acquisitions process of numerous projects.
I hold an undergraduate degree in Law and Business from the University of Warwick and am currently completing a Masters Degree in Real Estate from UCEM. My position means I review the property, location, and the deal for each potential nursery.
The Property
There are many aspects of a property to consider when assessing it’s suitability for an early years nursery setting. Below is a list of the initial factors that are considered when looking at the property:
- Building exterior – is it well positioned, attractive, and visible to potential parents?
- Size of the property – is the size within your ideal range? The size of the building has a considerable impact on the profitability of the business, therefore this must be in-line with your requirements.
- Parking / pick up & drop off – depending on the needs of the location, parking or a pick up and drop off area is a must.
- Outside area – to provide high quality childcare, a suitably sized outside area for the children is essential.
- Planning – what use class does the property hold? Are there any restrictions which limit your ability to run a day nursery from the premises?
Location
Using our demographic software, we analyse the suitability of a location by considering factors such as population statistics, ‘Acorn’ groups, and existing nurseries within the catchment. We also conduct Competitor Analysis to understand where we will sit in the market and what the size of the opportunity is. These due diligence checks help us to determine whether there is a gap in the market. Other factors to consider when thinking about location are street frontage, site visibility, access routes, and proximity of public transport links for both parents and staff.
The Deal
Establishing proposed deal terms from the outset is important to determine the financial suitability of the property for your nursery business. The main consideration will always be the rent or freehold price, however other elements of the deal can have a significant impact on your cashflow. Most commercial landlords will consider a rent-free period, the length of which will differ depending on the state of the property and length of the lease term. It is vital to negotiate a rent-free period that allows the nursery business to grow in its infancy; this period should also reflect the state of the building and subsequent building works you are carrying out to convert the property to a day nursery. The longer your proposed lease term, the more attractive your offer will be – consider this alongside any break clauses. Other items to consider include VAT, rent reviews, capital contributions, service charge, planning costs, and finders’ fees. To ensure a smooth process, you should maintain regular communication with the relevant parties regarding timescales. The more informed you are about timescales, the more prepared you will be with other property-related tasks, such as finalising nursery floor plans, completing surveys, and inviting contractors to tender.
