Australian alternative real estate investment manager Qualitas has secured an additional A$750m (€444m) from an institutional investor in the Qualitas Construction Debt Fund II, lifting the fund’s size to around A$1.95bn.
Qualitas said the additional equity would enable the fund to better capitalise on upcoming opportunities in the commercial real estate (CRE) private credit sector. The Melbourne-based manager will increase its co-investment in the fund to A$10m, representing a 0.5% commitment.
Andrew Schwartz, group managing director and co-founder of Qualitas, said: “The increase in dry powder heading into a new financial year allows us to take advantage of further dislocation in the CRE credit market.”
Schwartz said the last 12 months had been represented by a dynamic macro-economic environment driven by tightening fiscal policy and elevated inflation. This aggravated under-supply of housing and tight rental vacancy levels.
“Notwithstanding these factors – which we are currently experiencing – we are starting to see increases in off-the-plan apartment sale prices in certain areas with a deep supply shortage. This has assisted sponsors in restarting projects that may have been on hold.
“We’re also seeing increased caution as part of the development preparation and execution process. Australia’s construction financing sector is underpinned by a strong and well-regulated financial system.”
Schwarz said the firm remained cautious in deployment and vigilant in asset selection by “applying an equity lens” on its credit investments.
“Progress on deployment depends on the timing of settlement on investment opportunities that align with our risk framework and appetite,” he said.
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