APG has exercised an option to double its real estate debt exposure in Australia with MaxCap Group to A$1.2bn (€820m).

APG had already lifted its debt mandate once with the Melbourne-based non-bank lender since investing an initial A$300m in 2019.

Wayne Lasky, MaxCap executive chairman, told IPE Real Assets that APG had used an option to increase the initial investment to A$600m, with another option to double that amount to A$1.2bn.

“We are very close to fully committing the first A$600m from APG,” said Lasky, adding that the Dutch investor’s preference was to place its capital into senior debt.

The commitment from APG came after Apollo Fund Management, which now owns 50% of MaxCap, incrementally increased its debt investment to reach around $1bn.

Lasky said the opportunity to place the capital in the Australian market had increased, with Australian banks once again retreating from lending to property.

“If you look at our pipeline of qualified opportunities for the next 12 months, it is well in excess of A$8bn. We are writing new business at the moment of about A$1.25bn a quarter, so we are doing about A$5bn a year,” he said.

Graeme Torre, APG managing director and head of real estate for Asia-Pacific, said the pension fund was pleased to deepen its partnership with MaxCap on what he called “this scalable and sustainable strategy”.

“Commercial real estate debt, as an institutional asset class in Australia, is a proven strategy that offers strong risk-adjusted returns for the benefit of APG’s pension fund clients and their participants,” he said.

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