Specialist real estate private credit investment manager, Zagga, has secured $65 million through an oversubscribed corporate note arranged by fixed income specialist, FIIG Securities.
The four-year, senior secured note closed 30 per cent over its target figure of $50 million, offering investors access to a quality fixed income investment with a current yield of ~7.85% per annum (Bank Bill Swap Rate (BBSW) + 4.20%).
STOCKHEAD & THE AUSTRALIAN
Australia’s favourite asset isn’t listed on the ASX. It’s the thing people live in, argue over at auctions, and quietly trust as their financial foundation long after the dinner table conversations have ended.
Today, the residential property market is worth more than $12 trillion – much larger than the size of the Australian sharemarket – with about 55% of household wealth tied up in bricks and mortar.
Mixed news on the economy and an uptick in inflation has seen the RBA move to a neutral bias for interest rates. This means that the medium turn outlook has switched from expectations for lower interest rates to one now steady interest rate settings are expected into 2026.
At the same time, the housing market is recovering. New dwelling building approvals have rebounded strongly although the level of activity remains below the rate needed to address the housing shortage.
STOCKHEAD & THE AUSTRALIAN
The term ‘commercial’ has been synonymous with property for decades. It conjures images of office towers, industrial blocks, and retail precincts. However, in the context of commercial real estate debt (CRED) – part of the broader real estate private credit market – commercial doesn’t describe the building, but rather, the underlying loan transaction. It’s about lending to a commercial borrower, typically a developer, and assessing the quality of the sponsor, the project, risk exposure, and execution. Tom Cranfield, Executive Director of Risk & Execution at Zagga, explains why this distinction matters for investors.
Persistent volatility and increased correlation across asset classes have led investors to look beyond conventional tools in search of better defensive strategies to protect income and build long-term resilience. This has accelerated interest in alternative asset classes—particularly real estate private credit.
Unlike traditional bonds, which tend to lose value when rates rise, floating-rate real estate credit adapts with the market, making it a powerful tool in modern defensive strategies to protect income.
The Australian Wealth Management Awards is an unparalleled awards program that identifies the top businesses and professionals in the wealth management profession across the nation.
“We’re honoured to be recognised alongside some of the industry’s best. This achievement reflects the hard work of our team, the trust of our investors, and our shared belief in the role private credit can play in building more resilient, income-generating portfolios.”
The moderate pick up in house prices in recent months is linked to a stalling in the growth of new supply, with new listings for sale falling and immigration inflows above official forecasts in the March quarter 2025. The resilient strength in the labour market has, for now, helped to support the housing market which has been further assisted by the early effects of lower interest rates.
STOCKHEAD & THE AUSTRALIAN
Not all credit is created equal and thorough due diligence is essential. But, while prudent risk assessment is essential, investors must also separate fact from fiction. In private credit, persistent myths often cloud judgement and hold investors back from otherwise sound opportunities.
THE AUSTRALIAN
Just as corporate bonds provide an alternative to buying shares in companies, CRED provides exposure to the property market without needing to own the assets. However, unlike bonds, which depend on the yield curve, CRED offers a contracted return from day one.
YOUR INVESTMENT PROPERTY
With the commercial property market facing challenges, private credit is becoming a smart way for investors to still get good returns while avoiding too much risk.
We would like to acknowledge the Traditional Custodians of the lands, seas, and communities in which we provide our services. We would also like to pay our respects to the Elders past, present and emerging, and the continuing cultural influence they have on Australia.
Zagga Market Pty Limited (Australian Credit Licence 490904) ACN 611 662 401 acts as the Servicer of loans acting on behalf of the credit provider, Zagga Investments Pty Limited (AFSL 492354) ACN 615 154 786, trustee of the Zagga Investments Lending Trust
All portfolio numbers quoted correct as at 1 October 2025.
*Average investor return across the active portfolio as at 1 October 2025.
**Target return is after expenses and any applicable management fees for the year ended 30 June 2026. OCR = Australian Reserve Bank Official Cash Rate.
Past performance is not a reliable indicator of future performance and investments are subject to investment risk, fees and costs. Returns are not guaranteed.
Prospective investors wishing to invest in a Zagga direct investment or a Zagga Fund should fully consider the Information Memorandum, ZFF Fact Sheet and/or ZWF Brochure, available from Zagga, before applying to invest. Investments are subject to risks.
Articles on this website have been prepared by Zagga Investments Pty Limited (AFSL 492354) ACN 615 154 786 (Zagga) for information purposes only. It doesn’t take into account your objectives, financial situation or needs, nor is it intended as a substitute for any accounting, tax or other professional advice, consultation or service. Nothing in this article shall be construed as a solicitation to buy or sell any financial product, or to engage in or refrain from engaging in any transaction.
Past performance should not be taken as an indication or guarantee of future performance and no representation or warranty, express or implied, is made regarding future performance. Economic conditions may change.
Any analysis provided in this article is based on information obtained from sources believed to be reliable but Zagga does not make any representation or warranty that it is accurate, complete or up to date. Zagga accepts no obligation to correct or update the information or opinions in it. Any opinions expressed in this article are of the author and is subject to change without notice. Readers are reminded to exercise caution and use their own judgment when interpreting and applying the information contained in this article No member of Zagga accepts any liability whatsoever for any direct, indirect, consequential or other loss arising from any use of such information.
