This article is from the Australian Property Journal archive
OFFSHORE interest in Australia’s property market remains unabated. A private consortium of Asian investors has awarded Challis Capital Partners a $100 million mandate to hunt for commercial and residential development opportunities.
Challis Capital Partners director Bill Salouris said this is the first in a new series of innovative investment solutions Challis has designed to help fill the gap in the loan market for property developers.
He added that this is the largest-ever investment mandate since the group was established two years ago.
Challis will use the funds to invest as equity partners in mid-sized commercial and residential property developments, with preference for projects in the major cities such as Sydney and Melbourne.
The first two placements will be made in residential apartment developments in Sydney’s western suburbs. The first project is a $70 million residential property development in Ashfield, comprising 57 apartments with a mix of one, two and three bedrooms, including six townhouses. The second is a $65 million 120-apartment development in Penrith, with a mix of apartment configurations. An equity placement of $7 million will be made in the Ashfield project and a $4 million equity placement will be made in the Penrith development.
“Foreign investment in the housing market, as well as an active market of mid-sized developers, is essential to address this shortage.
“While there has been a significant recent pick up in apartment construction, the banks have also limited or completely stopped funding to this market. This has created huge demand for finance for quality residential apartment projects around the country,” he added.
“This line of funding will allow experienced mid-market developers to fund land purchases and to provide the much-needed equity shortfall imposed by the current tighter lending restrictions,”
Salouris said while the consortium has committed to an initial $100 million mandate, it has appetite and capacity to commit several further funding rounds to the Australian property market.
“It’s a clear demonstration of the Asian investment market’s upbeat view of the Australian housing sector over the longer term,” he concluded.
Australian Property Journal
