The funds available for deals are growing as investors including pension funds, sovereign wealth and insurance firms look for meaty returns hard to find in today's equity markets, especially in the beaten-down real estate sector.
Australian real estate specialist Qualitas (QAL.AX), whose backers include the Abu Dhabi Investment Authority, has nearly doubled funds under management to A$8 billion ($5.07 billion) since mid-2022, with roughly half the increase since this June.
U.S.-based PGIM Real Estate expects to deploy a further $1 billion in the country over the next few years, said its head of Australian real estate Steve Bulloch.
Lenders are expanding into residential and commercial construction as banks slow lending or exit, a March report from the Reserve Bank of Australia (RBA) said.
JUICY RETURNSInvestors can expect returns from 9% to 11% with the added security of loans pledged against real assets like condos or warehouses, often with a 30% to 40% equity buffer, said Paul Notaras, executive director at Barings Real Estate Australia.
Persons:
Stella Qiu, meaty, Steve Bulloch, JUICY, Paul Notaras, Notaras, Qualitas, Andrew Schwartz, Bonds, We've, Schwartz, Lewis Jackson, Rae Wee, Jamie Freed
Organizations:
REUTERS, Abu, Abu Dhabi Investment Authority, Commonwealth Bank, National Australia Bank, Westpac, ANZ Group, International Monetary, Reserve Bank of Australia, Australia, prudential, Reuters Graphics Reuters, Thomson
Locations:
Parramatta, Sydney, SYDNEY, Australian, Abu Dhabi, Australia, Qualitas, Singapore