Navigating the Rise of Australian Commercial Real Estate Debt: Opportunities and Insights

Source: Investor Daily
Moderator: Maja Garaca Djurdjevic
Date: 22 August 2024

WEBCAST

Zagga’s Director, Investment & Risk Tom Cranfield, joined fellow industry leaders, Andrew McVeigh, remara and Nick Raphaely, AltX to discuss the rapidly evolving Australian commercial real estate debt sector.

Over recent years, Australian commercial real estate debt has witnessed remarkable growth, reaching an impressive $447 billion by June 2023. Non-bank lenders have become pivotal players, commanding a substantial $74 billion market share. This transformation reflects significant market dynamics and regulatory reforms, prompting investors to explore alternative financing options.

With attractive yields, low correlation with other assets, and resilience during economic uncertainties, Australian commercial real estate debt presents a promising opportunity for investors seeking stable returns.

Hosted by Investor Daily, this webinar delved into the factors driving this growth, the challenges and opportunities for non-bank lenders, and the future trajectory of the Australian commercial real estate debt sector.

Key discussion points:

the surge in demand for CRE debt from both borrowers and investors
housing supply/demand imbalance as a critical factor driving CRE debt growth
the impact of builder insolvencies on the construction sector and its investment viability
reasons borrowers opt for non-bank/private lender money despite higher costs
the future of non-bank lenders and the potential for major banks to reclaim market share
sensitising for market movements and the impact of commercial property value fluctuations
the benefits of different forms of property credit exposure and their risk/return profiles in a sideways property market

This article is for information purposes only. It does not take into account your objectives, financial situation or needs. Any opinion expressed in this article are of the author and is subject to change without notice. Readers are reminded to exercise caution and use their own judgment when interpreting and applying the information contained in this article.

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Zagga Market Pty Limited (Australian Credit Licence 490904) ACN 611 662 401 acts as the Servicer of loans acting on behalf of the credit provider, Zagga Investments Pty Limited (AFSL 492354) ACN 615 154 786, trustee of the Zagga Investments Lending Trust

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All portfolio numbers quoted correct as at 30 October 2024.

*Average investor return across the active portfolio as at 30 October 2024.

**Target return is after expenses and any applicable management fees for the year ending 30 June 2024. OCR = Australian Reserve Bank Official Cash Rate.

Past performance is not a reliable indicator of future performance and investments are subject to investment risk, fees and costs. Returns are not guaranteed.

Prospective investors wishing to invest in a Zagga direct investment or a Zagga Fund should fully consider the Information Memorandum, ZFF Fact Sheet and/or ZWF Brochure, available from Zagga, before applying to invest. Investments are subject to risks.

Articles on this website have been prepared by Zagga Investments Pty Limited (AFSL 492354) ACN 615 154 786 (Zagga) for information purposes only. It doesn’t take into account your objectives, financial situation or needs, nor is it intended as a substitute for any accounting, tax or other professional advice, consultation or service. Nothing in this article shall be construed as a solicitation to buy or sell any financial product, or to engage in or refrain from engaging in any transaction.

Past performance should not be taken as an indication or guarantee of future performance and no representation or warranty, express or implied, is made regarding future performance. Economic conditions may change.

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