FuturePlace Interview Spotlight: Stefan Piruk

FuturePlace: What property development trends are you seeing in the childcare market in Australia?

Stefan Piruk: We’ve seen a reduction in childcare developments in the last 24 months due to increasing construction costs, land valuations and higher interest rates. It is becoming increasingly difficult for childcare developments to work unless the developer is working closely with the tenant.

FuturePlace: What are the key factors driving demand for new childcare facilities in 2025 and beyond?

Stefan Piruk: Urban sprawl, growth of residential areas and population growth leads to new childcare opportunities because most families prefer children to attend a centre close to their home. Additionally, rising workforce participation rates among parents, particularly women, are creating a greater demand for reliable childcare.

FuturePlace: How have regulatory changes or government initiatives impacted the sector recently?

Stefan Piruk: From a developer perspective, the licensing requirements for a childcare centre plays an important part because it adds another layer to the completion of a development that cannot be controlled by the builder or developer. Due to the licensing process and the barrier it presents to entering the sector, there seems to be fewer childcare operators in the market, resulting in less quality tenants in the sector. In addition to this, numerous government agencies, such as ECRU, have faced staffing and resourcing challenges since COVID, which has a knock-on effect to the sector and licensing applications.

On a positive spin, due to the heavy regulation on the industry, the childcare sector’s investment appeal is strengthened, given the stringent licensing and operating frameworks that tenants are faced with.

FuturePlace: From a property developer perspective what challenges do you face in designing, developing and building childcare centres, and how do you overcome them?

Stefan Piruk: The biggest challenge for childcare developments is making the deal stack. In the last 3 years land valuations have increased, construction has significantly increased, and it is harder to find sites because land is selling quickly and easily. Developers can overcome this by working closely with the tenant and looking at other ways to make the deal work, aside from rent increases.

FuturePlace: What advice would you give to childcare operators looking to partner with property developers?

Stefan Piruk: Make sure that you share similar values with a developer who you can trust. In the current climate, it is crucial that the developer and the tenant are aligned and on the same page. The developer cannot cut corners to reduce the build cost and the tenant cannot want everything, otherwise the deal will not stack.

Partnering with a developer that has significant experience also means they will be more familiar with the specific regulatory requirements and complex design considerations necessary for creating a successful childcare centre.

FuturePlace: What opportunities do you see for collaboration between property developers and operators in the childcare sector?

Stefan Piruk: The most successful childcare developments are those that come from close relationships, this is the only way it works, especially in the current climate. Given their different incentives, trust between developers and operators and ongoing collaboration means that both parties can work together towards an outcome that works.

Stefan will be speaking at the 2nd Annual Childcare and Real Estate Summit, where he will join a panel of industry experts to discuss the complexities of childcare property development. The session will explore how investors, developers, and operators can collaborate effectively, navigate rising costs, and maximise the potential of development opportunities. Whether you’re directly involved in childcare property or interested in understanding the evolving landscape, this expert panel offers valuable insights into creating successful and sustainable childcare centres.

You can learn more about the summit here.