This article is from the Australian Property Journal archive
SPECIALIST property lender Pallas Capital and Credit Suisse have set up a new lending vehicle, Pallas NZ Funding Trust No. 1 (PFT NZ), it first in New Zealand’s CRE debt market.
PFT NZ has already funded six loans worth NZ$29 million, since its launch and has had NZ$360 million approved by its funding partners, including Credit Suisse.
The fund will target loans ranging between NZ$2 – 10 million, though will be able to make larger loans where credit criteria is met, lending money for pre-development loans, residual stock loans and investment property loans.
It will target medium sized CRE loan types and borrowers that lack liquidity, responding to tightening lending conditions from banks and existing non-bank lenders.
“We are very excited to take our successful lending model into New Zealand, supported again by Credit Suisse,” said Dan Gallen, CIO of Pallas Capital.
“The CRE loans offered by our PFT vehicles provide crucial support to our SME borrowers at a time when loans from traditional banks, and other non-bank lenders, are harder to obtain and carry more onerous loan terms.”
PFT NZ is modelled on the November 2021-launched l Pallas Funding Trust No. 1 (PFT No. 1), which is the fastest growing fund managed by Pallas Capital and is majority funded by Credit Suisse.
Lending to medium sized SMEs in Australia, PFT No.1 has made 72 loans for a total value of AU$320 million.
“The market segment serviced by the PFT vehicles in Australia and New Zealand, whilst underserviced at present, generates substantial lending volumes given that most commercial properties have a value range of AU$1 – AU$15 million,” added Gallen.
“This is precisely where PFT No. 1 and PFT NZ focus their lending businesses. We are confident that PFT NZ will emulate the success of PFT No. 1 as the lending team in our new Auckland office have long experience and deep relationships in the New Zealand CRE loan market.”
Gallen also noted that while other non-bank lenders compete with PFT, many are funded by retail or high net worth investors, which are more vulnerable to market sentiments.
“When it was launched last year PFT No.1 represented a new asset class for Credit Suisse in Australia,” said Will Farrant, head of securitised products for APAC at Credit Suisse.
“We looked for ways to expand how we can support Pallas Capital from the outset, and so are very pleased to now offer the same funding structure in New Zealand. We are confident of Pallas Capital’s future success and will continue to seek ways to do more with them going forward.”
