Three Little Birds

The Challenge

• The Gerald Eve Nursery team advised on the sale and leaseback of a portfolio of four London nurseries.

The Solution

• The sites, acquired by Three Little Birds in March 2021, are at varying stages of maturity, with two having opened in August and September 2020. The portfolio’s huge growth potential was a deciding factor for the nursery operator, who intend to grow to 30 sites whilst retaining their focus on providing premium quality childcare.
• We undertook a discreet, targeted marketing campaign and identified a specialist investor, AEW UK Real Return Fund, who acquired the freeholds with new 25-year index-linked leases. The deal enables Three Little Birds to focus on their core business, operating nurseries and educating children, whilst the capital generated will facilitate their ambitious expansion plans.

The Result

• The price paid was £13.7 million and represents a Net Initial Yield of 5.25%, reflective of the strong investor appetite for well-located, high quality nurseries and the emergence of social impact funds focused on socially responsible real estate classes with sustainable long-term fundamentals.