Business surpasses $1 billion FUM milestone as demand for real estate private credit booms.
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%).
Commenting on the raise, FIIG Head of Capital Markets and Syndication, Daniel Jones, said investors were attracted by the bond’s structural features, including Zagga’s well-credentialed management, real asset security, and transparency of the underlying portfolio.
"“The oversubscription of this issuance evidences the strong investor appetite for disciplined commercial real estate credit investment,” Mr Jones said.
“Given current volatility, there is strong investor demand for Australian fixed income, with the market experiencing increased activity and rapid growth. The overlay of real estate adds further attractive benefits, including physical security over quality, well-supported assets.
“As the sole lead arranger, FIIG originated and structured the deal, ensuring the offer met investor demand, while providing Zagga with flexible long-term capital that complements its other funding sources.”
Zagga and FIIG first partnered on a four-year, $30 million Senior Secured Note issue in November 2021, with a further $13 million tap-issue in March 2022. The $43 million issuance matured in November. Due to the success of the previous issuance, and anticipated interest from existing note holders and new investors, the decision was made to extend the partnership and expand the latest raise.
The funds will be managed by Zagga and allocated to mid-market residential development projects along Australia’s eastern seaboard, predominantly focused on Sydney, which is the deepest and most liquid market.
Commenting on the market opportunity, Zagga CEO and Co-Founder, Alan Greenstein, said the structural imbalances in the Australian property market present a compelling investment case.
“Australian real estate has enjoyed 20 years of sustained growth. A nationwide housing shortage, pullback from traditional lenders due to capital and regulatory constraints, and a booming population further strengthen the sector’s momentum,” Mr Greenstein said.
“We have a strong project pipeline, which these funds will be allocated towards, such as the construction of boutique apartments in Mosman, a luxury residential development in Dee Why, and early-stage funding for developments in Marrickville and Manly.
“Each of these developments benefit from the significant tailwinds in Sydney’s property market, which is experiencing strong demand for housing but a significant lack of supply.
“In our view, there has never been a better time for experienced, specialist real estate private credit managers to access investment-grade transactions with strong sponsors and counterparties.”
Zagga surpasses $1 billion milestone
Australia’s private credit market is now valued at $224 billion, growing nine percent year-on-year. Commercial real estate lending makes up $92 billion of the market1.
As demand for real estate private credit opportunities increases, Zagga has surpassed the significant milestone of $1 billion in funds under management (FUM).
With 50 percent year-on-year growth, the specialist manager sees significant opportunities ahead, targeting $5 billion in FUM by 2030.
“The real estate private credit market has changed significantly over the eight years since we started Zagga with 32 foundational investors whom we are proud to still have with us today,” Mr Greenstein said.
“As real estate private credit in Australia gains global recognition as an established and growing asset class, we are witnessing the asset class move from an ‘alternative’ to a core part of a well-diversified portfolio.”
Reflecting this evolution, Zagga now invests on behalf of over one thousand investment entities, comprising domestic and offshore sophisticated individuals, family offices, and institutional investors.
“Looking ahead, we expect to originate larger loan sizes as the dynamics of the real estate market change, and we are increasing funds under management to support these opportunities. But our strategy will not waiver from our conservative, transparent, investor-first approach – values upon which Zagga was founded and remain extremely relevant today.”
Since originating its first loan in 2017, Zagga has invested in excess of AUD $2.5 billion across more than 300 transactions in the Australian commercial real estate sector, returning over $1.5 billion to its global investor base across more than 200 successful exits.
- Alvarez & Marsal, Australian Private Debt Market Review, November 2025
