Article by Jennifer Prunty, Surveyor, Retail at Lisney. (jprunty@lisney.com | +353 1 638 2700 )

Dublin Crèche Market Overview

The crèche property market in the Greater Dublin Area is experiencing notable growth which is driven by increasing demand for childcare services and the delivery of new residential developments. With over 1,200 childcare providers registered under the Early Years Services in Dublin, many facilities are operating at full capacity, unable to meet the rising need for childcare spaces. This sector presents both opportunities and challenges as the year progresses.

Demand for crèche facilities continues to increase, with many providers maintaining lengthy waiting lists for childcare spaces. Completion of new residential developments is further contributing to demand, as planning guidelines require at least one childcare facility per 75 dwellings in new housing projects.

Operator Demand and Market Dynamics

Operators remain active in the market despite ongoing challenges, such as rising operational costs, staffing shortages, and retention issues, and their inability to recover VAT on certain costs (e.g. rent, fitout expenses).

Childcare challenges are also indirectly impacting Dublin businesses, particularly in recruiting and retaining staff. A recent Dublin Chamber survey found that 20% of respondents identified childcare as their biggest obstacle.

Larger crèche operators, typically requiring a minimum of 350 sqm, are particularly active, focusing on acquiring larger spaces to achieve commercial viability. Equipped with regulatory knowledge, experience in fitting out shell and core units along with the necessary access to funding, these operators are investing in facilities that can cater for a higher number of children.  This allows them to offset substantial initial investment costs.

In contrast, smaller crèche spaces (under 350 sqm) are less in demand but present opportunities for smaller operators or industry professionals looking to establish or expand their ventures. These spaces are particularly appealing for those seeking locations near existing businesses or residential hubs.

Vacant Units and Repurposing Opportunities

Despite strong demand, some purpose-built crèche units remain vacant, primarily due to high fit-out costs, location or inadequate size. The shell-and-core delivery of crèche spaces in new developments poses a significant financial burden for operators.

Some developers are exploring alternative uses for long-vacant crèche units, including converting them into residential units. While this approach risks exacerbating the childcare space shortage, it could be mitigated by incorporating more operator-friendly crèche spaces into new developments. Options like larger units or spaces delivered in a “grey box” condition, rather than shell-and-core, may enhance market appeal.

Another alternative involves repurposing vacant crèche spaces into daycare facilities for the elderly, addressing another growing societal need. Many planning requirements for crèche spaces, such as outdoor area provisions, align well with eldercare facility needs. Smaller units may be particularly suited for such conversions.

Outlook

The crèche market in the Greater Dublin Area is expected to remain active, supported by ongoing residential development and sustained demand for childcare services. Policy adjustments may emerge as government and planners aim to enhance childcare provision.

Success in this evolving sector requires an understanding of regulatory requirements—such as planning guidelines, childcare legislation, and Tusla standards—along with insights into operator preferences and market trends. Identifying locations that align with both planning and market needs will be crucial.

While challenges persist, including high operational costs and staffing shortages, the market offers significant opportunities for growth.