This article is from the Australian Property Journal archive
TAIWANESE state-run lender Hua Nan Commercial Bank has sold its $1.944 billion loan tied to Walker Corporation’s Parramatta Square development.
Following a decision made last month, Hua Nan sold its lending rights and obligations to ANZ Bank and Commonwealth Bank for $30 million.
The bank said it incurred a minor loss of approximately $150,000 from the sale.
The sale is part of a broader strategy announced last month by Taiwan’s largest banks to rein in real estate lending to meet the financial regulator’s property loan quota.
The country’s finance regulator has reminded the banks not to exceed the 30% ratio real estate loan to available cash on hand ratio.
Meanwhile ANZ Bank and CBA’s purchase of the loan book shows that Australia’s Big Four still have a conservative lending appetite for property, select major developers such as Walker Corp.
On the other hand, over 70% of private developers, investors, fund managers are increasingly turning to private credit over the past five years, embracing faster decision making, higher loan-to-value ratios and more flexible terms compared to the offerings from the major banks.
The inaugural Centuria Bass Australian Property Development and Finance Index 2024, which surveyed 67 developers, investors, fund managers and brokers, also showed 72% of respondents’ loans are now sourced through private credit.
The decision by the Big Four to be more conservative has paved the way for more non-bank players to grab a greater share of the market.
Global investment giant Warburg Pincus committed $490 million to MA Financial’s $1 billion Real Estate Credit Vehicle.
David Di Pilla’s HMC Capital, with ambitions to build a $5 billion private credit platform, acquired Payton Capital earlier this year in a $127.5 million deal, while $12.2 billion specialist alternative investment manager Regal Partners acquired Adrian Redlich’s commercial real estate lending business Merricks Capital for $235 million.
Centuria Bass – which has grown to circa $2 billion in funds under management – recently secured a new circa-$150 million warehouse facility with an initial $100 million backing from global investment bank UBS, and Centuria increased its interest in Centuria Bass in April to 80% for a consideration of $57 million.
Major players in the space also include MaxCap Group, which has more than $8 billion in funds.
