Two large North American investors have placed AUD280m (€188m) with Australian commercial real estate debt specialist MaxCap to finance a large, mixed-use project in Melbourne known as Swanston Central.
Wayne Lasky, MaxCap’s managing director, declined to name the investors but said both had previously invested in Australian commercial real estate debt.
Lasky described the placement as one of Australia’s largest non-bank funded deals. “Funding has been provided through a AUD280m senior-stretch loan on a peak debt basis,” he said.
“The parameters of the transaction lie outside those on which the Australian major banks are currently able to fund, both in terms of size [they will not typically fund more than $100m for a single transaction], gearing, and structure.”
Lasky added that the transaction represents a significant milestone for both MaxCap and Australia’s non-bank sector in terms of loan amount, structure and funding sources.
He told IPE Real Estate: “Senior-stretch facilities for jumbo debt pieces of multi-stage projects are increasingly being structured on a peak debt basis.”
The developer is an Australian Chinese group known as Hengyi, which is affiliated with mainland Chinese group, Shandong HYI.
Swanston Central will have 1039 apartments, and some 2,600sqm of retail and office space.
According to the marketing agent, Colliers International, 95% of the apartments have been presold prior to commencement of construction.
MaxCap is also moving towards a final close for its first mortgage fund, which was launched last December and is expected to raise AUD125m.
Lasky said AUD$60m had been raised and he expected a further AUD$60m before the end of the year.
The fund, for which a key strategy involves financing site acquisitions, has an average loan-to-value ratio of 56%.
“These are sites which are sought-after by opportunistic investors who will redevelop the land,” Lasky said. “We exit from the loans in 12 to 18 months.”
The mortgage fund is currently generating a net internal rate of return of 14.6% and an annualised cash yield of 10.06%.