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Nurseries enterprise

Teather & Greenwood Investment Management has introduced Childcare Corporation 6, an enterprise investment scheme that aims to raise up to £10m for the building and operation of around 10 purpose-built children&#39s nurseries in the Midlands and the South of England.

This EIS takes up the objectives of the previous five Childcare Corporation schemes by providing private daycare facilities for children aged between three months and five years. Each nursery is expected to have places for 100 children.

The directors of the EIS have built up a track record through the previous Childcare Corporation EISs and a sixth was established for investors who want to take advantage of this.

The directors realise that property prices are rising and estimate the cost of each site at between £275,000 and £350,000, with London sites anticipated to exceed this range.

However, they believe their success in securing sites for the previous EISs will help them negotiate reasonable prices.

The company believes that childcare is a growing market, with demand for nursery places from working parents exceeding supply, since parents may be more comfortable relying on an organisation for childcare rather than a full-time nanny.

The advantage for investors is that they may profit from the nurseries as businesses and from the value of the property if prices increase. In addition, investors will receive the tax breaks associated with an EIS.

However, as an unquoted company which is developing new businesses, the risks for investors could be high.

The success of the EIS will depend on a range of factors such as the availability of development sites at the right price, being able to carry out building work on time so extra costs are not incurred and the continuing demand for childcare provision.

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