This article is from the Australian Property Journal archive
CENTURIA has moved into the real estate debt markets space, securing a 50% investment in Bass Capital that presents a pipeline of opportunities worth more than $300 million.
The $24 million deal also includes an option for Centuria to acquire the remaining half share in five years. It has partnered with Bass Capital on lending opportunities over the past three years.
Currently in Australia, the big four banks dominate account for over 75% market share of all lending – compared with estimates of less than 40% for all banks in the US – and the parties are confident that share will increase.
According to Centuria’s joint CEO, Jason Huljich, the joint venture will expand Centuria’s unlisted funds platform, providing a diversified suite of investment opportunities for its clients, while offering non-banking finance for real estate secured transactions including development projects, bridge finance and residual stock.
It will begin operating with a circa $270 million committed loan book, more than $300 million in pipeline opportunities and a $107 million open-ended debt fund.
“Our investment in this platform is an opportunity to capitalise on strong demand from our high-net-worth investors for debt products, as they seek a diversified investment risk profile,” Centuria’s joint CEO, Jason Huljich said.
The transaction will be accretive to Centuria’s 2022 financial year earnings.
Bass Capital also brings 20 current debt funds backed by ultra and high-net-worth investors. It was established in 2016 by former UBS European head of leveraged finance and debt capital markets, Giles Borten, and former managing director of Wingate and Gresham Partners, Nicholas Goh, who will continue to lead the real estate debt team.
“We will leverage Centuria’s Australasian scale, balance sheet and the team’s deep real estate relationships and expertise across traditional and alternative real estate sectors, to grow the platform significantly,” Borten and Goh said.
Bass Capital has delivered an average internal rate of return of more than 12% each year.
At the same time, $85 billion global investment manager Schroder entered into a deal to buy a majority stake in Multiplex scion Andrew Roberts’ non-bank commercial real estate lending business RF Eclipse.
