Funding to the commercial property sector has been cut by about 40 per cent, prompting Perpetual Investments to seek out opportunities in the area to provide alternative sources of financing.
Perpetual recently closed capital raisings for its Secured Private Debt fund, which grew to $170 million. The fund lends to commercial property investors.
Perpetual group executive, income and multi-sector, Richard Brandweiner said it had become a “significantly dislocated” market.
“Funding to the commercial property sector in the past year has been cut by almost $21 billion, which is approximately 40 per cent of total lending to the sector, and financing from alternative sources such as foreign banks and second tier lenders is also disappearing,” he said.
Yet the type of financing provided by the new fund had implications for the broader market, he added, in that it would free-up credit lines with the banks and allow for the release of development and construction financing.
“It also means that these institutions are now indirectly funding future employment across construction, trades, and building material supplies industries.”
