APG Investments Asia Limited has increased its commitment to Australian commercial real estate debt via leading investment manager MaxCap Group (MaxCap). APG has made a commitment to the strategy of $600 million (€586 million) with a further re-up option to increase total commitments to $1.2 billion (€1.17 billion). With this deal, APG assists in addressing the funding gap in the Australian real estate market.
The partnership, established in 2019, will continue to target first mortgage loans lending across all real estate asset classes. The withdrawal of the four major Australian banks from commercial real estate debt exposure is causing a lack of supply of new residential units, says Graeme Torre, Managing Director and Head of Real Estate, Asia Pacific. “By assisting developers proceed with their construction, we are indirectly supporting the Australian residential sector by increasing the supply of new units. The projects are predominately residential developments and include apartments as well as sub-divided land (for houses). APG and MaxCap also lend to industrial, retail, office and hotel development projects, but these are less common.”
Proven strategy
On the partnership he states: “We are pleased to deepen our partnership with MaxCap on 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.”
Uncertain times
Wayne Lasky, Executive Chairman MaxCap said: “We are thrilled to strengthen our relationship with APG, one of the largest real estate investor in the world. Commercial real estate credit continues to play an increasingly important role in uncertain times reducing portfolio volatility and increasing returns, in addition to acting as an inflationary hedge due to the floating rate structure of loans in Australia.”
APG increases its’ investment on behalf of its pension fund clients ABP, SPW and PPF APG.