The Power of Private CRED:

Why the time is NOW

Four years since the biggest economic and social shock in a century began...the world now looks significantly different.

In the four years since COVID-19 shut down the world, a new and different investment landscape has emerged. It has broken definitively with the decade and half before it, and reshaped investors’ expectations and strategies.

Investors are now seeking a sense of direction in otherwise volatile markets, turning to assets like infrastructure, real estate, and corporate debt.

Commercial real estate beyond housing

As the Australian population booms, the demand for housing is huge, yet housing supply remains insufficient, and prices continue to climb.

Beyond housing, a range of commercial developments are in demand, from industrial warehouses that fuel e-commerce, through to the childcare, healthcare and retail centres that support this growing population.

It’s against this background that Commercial Real Estate Debt (CRED) has emerged as a popular investment option providing investors with access to a more predictable income stream, with attractive returns and lower volatility. This comes at a time when the demand for housing is huge – as the Australian population booms, housing supply remains insufficient, and prices continue to climb.

The Power of Private CRED: Why the time is NOW

Private debt investors are playing a growing role in addressing the housing crisis in Australia, as they provide an additional source of much-needed capital to housing developers.

The rise of CRED comes amid a global shift towards private debt as an asset class, with global private debt assets under management expected to almost double between 2022 and 20281. Our latest white paper explores how private lenders can provide a differentiated offering from banks.

“With strict capital requirements and strong market dominance, Australia’s banks have less incentive to ‘go the extra mile’ when assessing commercial real estate borrowers. If a property developer or asset owner has more complex or ‘out of the box’ borrowing needs, the private lending market can be more suited to assessing the specific risk profile and structuring a deal appropriately,”

This latest white paper outlines the economic and market trends driving the growth of CRED in Australia and explains why investors may benefit from the CRED asset class as a source of predictable income, capital preservation and portfolio diversification.

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Download our latest white paper to find out more

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