This article is from the Australian Property Journal archive
ALTERNATIVE real estate investment manager Qualitas has secured a second major backing from a global investor this week, with the Abu Dhabi Investment Authority (ADIA) committing a further $300 million to its QDCI platform.
It represents ADIA’s third commitment to the platform and brings the total committed capital of QDCI to $1.67 billion since ADIA’s initial investment in August 2022.
The latest commitment will see $220 million activated immediately for deployment and the remaining $80 million to be activated at ADIA’s discretion. The mandate continues to have a wide investment scope, focusing on the growing Australian commercial real estate (CRE) private credit market and senior credit strategies.
Qualitas’ co-investment in QDCI remains at A$50 million.
Andrew Schwartz, group managing director and co-founder of Qualitas, said, “This latest increase in commitment from ADIA demonstrates the depth of opportunities within the Australian CRE private credit market and further evidences Qualitas’ ability to attract, retain and grow our institutional investor base – a key differentiator in the current environment.”
The investment comes hot on the heels of Qualitas securing $550 million from a North American player that will be invested in commercial real estate private credit across construction loans, predevelopment land loans and investment loans.
Australia is becoming a destination of choice for commercial real estate lending.
In the past week, Tokyo-headquartered CREAL made its first overseas investment by providing finance for a $39.5 million self-storage and warehouse development project in Kirrawee. Meanwhile, the alternative investments platform of financial services giant Goldman Sachs’ Asset Management division closed a $7 billion-plus raising to partner with developers in Australia, the US and Europe looking for real estate finance. Capital was raised from sovereign wealth funds, insurance companies, and US and international pension plans.
Non-bank lending’s local growth trajectory has seen its share in Australian commercial real estate debt (ACRED) increase from 10.4% in 2020 to 16% currently, according to Foresight Analytics, as developers chase alternative avenues to financing. The big four banks have seen their market share drop from 86% to 73% in the past decade.
The value of the non-bank lending ACRED market is estimated at $74 billion, and could market could double over the next five years.
On the local front, David Di Pilla’s HMC Capital, harbouring aims to build a $5 billion private credit platform, last month acquired Payton Capital in a $127.5 million deal.
Real estate financier MaxCap Group and Troon Group have just secured a $400 million development pipeline, acquiring a substantial parcel of existing industrial properties in Melbourne’s Cheltenham and a planning approval for a new industrial estate in Clayton South.
Bank and non-bank lenders have been generally favouring investments in Australian data centres, health care, life sciences, childcare and self-storage real estate as the traditional sectors struggle through structural headwinds, higher interest rates and high inflation.
Outstanding senior commercial real estate debt in Asia Pacific totals at least US$257 billion, and Australia faces the largest funding gap in the region, at US$4.6 billion.
