This article is from the Australian Property Journal archive
ALTERNATIVE real estate investment manager Qualitas has posted a strong set of numbers for FY24 and is poised for further growth in the coming year, as it expected invested funds under management to expand further as demand for private credit booms, particularly within the commercial real estate sector.
It announced a 22% increased funds management revenue for the year to $53.69 million, with normalised group EBITDA up 25% to $41.89 million, and statutory group net profit after tax up 17% to $26.18 million.
Qualitas has $8.9 billion in committed funds under management (FUM), which grew 46% on FY23, and its $2.8 billion net capital inflow was 55% higher. It deployed $4.2 billion, predominantly in private credit, an increase of 40%, while invested FUM lifted 13% to $4.4 billion.
Qualitas closed out FY24 by securing a $550 million investment from a North American global investor that is set to be invested in commercial real estate private credit across construction loans, predevelopment land loans and investment loans.
More recently, it has teamed up with prolific developer Tim Gurner to buy out Newmark Capital’s interest in the $2.75 billion Jam Factory development in Melbourne’s South Yarra..
Gurner and Qualitas will invest $180 million to settle on and develop the mixed-use precinct, becoming the sole owners of the 20,000 sqm site.
FY25 net profit before tax is expected to grow by between 26% and 41% to between $49 million and $55 million. Earnings per security is estimated to be between 11.50c and 12.91c per security.
“Qualitas is well-positioned to deliver strong growth in FY25. We expect invested FUM will increase significantly from deployment in the prior period, as the undrawn construction facilities are progressively drawn, and from the continued deployment of dry powder,” group managing director and co-founder Andrew Schwartz.
“This will support the continued growth of our funds management earnings and deployment capacity in FY25.
“Looking forward, our investment pipeline gives us confidence of strong continued deployment. Having recognised the opportunity in front of us, we are growing our investment team and investing further into technology to support our next phase of growth for the business.”
Schwartz said the record net capital inflow and deployment numbers demonstrated the “high conviction in Qualitas from an increasing number of large institutional investors”.
“We see significant investor demand for private credit continuing, particularly within the commercial real estate sector.
“It offers earnings stability in an environment where interest rates have risen and asset values are recalibrating.”
He said the deployment environment for Qualitas’ funds remains strong.
“We have seen signs of the next residential development cycle with off-the-plan realisation values for new projects rising and building costs moderating. We remain confident in our balance sheet capacity and retained earnings to support co-investment and to achieve our FUM growth ambition.”
It will aim to optimise returns on shareholder equity through underwriting and co-investment opportunities including by taking direct co-investment senior loan allocations.
“As a fast-growing business, our objective is to maximise the self-sufficiency of our balance sheet to support our future growth.”
