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APRA crackdown creates fresh appetite for private money

Major banks have shifted away from the commercial lending sector as a result of regulatory requirements, according to one industry specialist.

Daniel Holden, director of construction finance group HoldenCAPITAL, says major banks’ appetite for construction lending has been significantly pared back to ensure they maintain appropriate capital reserve exposures.

“Developers and investors cannot rely on their long-term lender to provide them with the necessary funding following the recent crackdown by ASIC and APRA,” he said.

“But a wide range of private providers of debt and equity [are] entering the market or broadening their existing reach, and private money has become the new black for the construction sector.

“The challenge for today’s developer is to identify which ones best fit both their business and specific project needs.”

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Mr Holden said he will be conducting an Asia-Pacific roadshow to meet with high net worth individuals and organisations seeking to invest in commercial property.

A recent report by Colliers International found that Melbourne and Sydney are the second and third most popular commercial property hotspots for global investors this year.

The group's Global Investor Outlook report also found that domestic investors continue to dominate direct commercial property investment volumes, with just a third of total investment coming from offshore.

[Related: ‘Hot’ commercial property benefits from share market uncertainty]

APRA crackdown creates fresh appetite for private money

>Daniel Holden, director of construction finance group HoldenCAPITAL, says major banks’ appetite for construction lending has been significantly pared back to ensure they maintain appropriate capital reserve exposures.

“Developers and investors cannot rely on their long-term lender to provide them with the necessary funding following the recent crackdown by ASIC and APRA,” he said.

“But a wide range of private providers of debt and equity [are] entering the market or broadening their existing reach, and private money has become the new black for the construction sector.

“The challenge for today’s developer is to identify which ones best fit both their business and specific project needs.”

Mr Holden said he will be conducting an Asia-Pacific roadshow to meet with high net worth individuals and organisations seeking to invest in commercial property.

A recent report by Colliers International found that Melbourne and Sydney are the second and third most popular commercial property hotspots for global investors this year.

The group's Global Investor Outlook report also found that domestic investors continue to dominate direct commercial property investment volumes, with just a third of total investment coming from offshore.

[Related: ‘Hot’ commercial property benefits from share market uncertainty]

APRA crackdown creates fresh appetite for private money
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