Australian specialist real estate financier MaxCap Group has expanded into New Zealand with a joint venture with Bayley Corporation and investment advisory firm Forsyth Barr.
MaxCap will own 50% of the joint venture, known as MaxCap NZ. Its New Zealand partners will have an equal stake in the remaining half interest.
Brae Sokolski, MaxCap’s co-founder and CIO, said the recent drop in New Zealand’s official cash rate to 1% and the flow-on effect on bank deposit rates meant that New Zealand investors were looking for a higher level of return.
“Bayley’s will be assisting us with originating lending opportunities through its far-reaching network and client base across New Zealand.
“We will also be looking to access Kiwi (NZ) currency funding sources, focusing initially on high net worth private investors utilising Forsyth Barr’s considerable expertise and experience in wealth management,” said Sokolski.
Bayley’s’ managing director Mike Bayley said the company’s involvement in the joint venture had been driven by current limitations on commercial property funding from retail banks.
“These limitations are, at times, having a negative effect on market activity and are a source of frustration for clients, particularly developers who play a vital role in creating new leasing and investment opportunities,” he said.
For this reason, he added the firm had started to look for alternative sources of funding for clients.
Jonty Edgar, co-head of markets for Forsyth Barr, said Max Cap Group’s move across the Tasman would provide the firm’s wholesale and institutional clients with more commercial property investment options.
“We have been looking to diversify our offerings in the property sector, driven by private investor demand for alternative investments with higher yields and attractive risk-reward dynamics.,” said Edgar.
Mark Farrands, the newly-appointed chief investment officer for MaxCap NZ, said negotiations were already well advanced on funding for several land development deals in Queenstown and Auckland.
MaxCap Group, which specialises in commercial real estate debt funding, currently has A$4.1bn (€2.5bn) of funds under management, from investors including AustralianSuper and APG.