Australian alternative real estate investment manager Qualitas Limited has recently announced that it has secured an increased capital commitment from an institutional investor of A$750m in the Qualitas Construction Debt Fund II.
This will enable the Fund to capitalise on upcoming opportunities in the CRE private credit sector, increasing the size of the Fund to approximately A$1.95bn of committed capital.
Qualitas will increase its co-investment in the Fund to A$10m.
FUM has increased to approximately A$6.8bn, representing FUM growth of 12% since 8 May 2023 and 59% since 30 June 2022.
“This additional capital commitment highlights Qualitas’ position as a leading alternative real estate investment manager in the Australian CRE sector. We place a high value on our long-term established relationships with institutional investors, our strong balance sheet and deep bench of talent, which we believe continue to support our consistent growth in a sector that has a widening addressable market.
“The last twelve months have been represented by a dynamic macroeconomic environment driven by tightening fiscal policy and elevated inflation. Notwithstanding these factors, the undersupply of housing is a key driver of the tight rental vacancy levels we are currently experiencing, and we are starting to see increases in off the plan apartment sale prices in certain areas with 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. Qualitas implements effective structuring to mitigate risks while providing financing solutions to quality sponsors with increasing requirements unmet by traditional financiers. A$750m increase in dry powder heading into a new financial year allows us to take advantage of further dislocation in the CRE credit market. We continue to be cautious in deployment and remain vigilant in asset selection by applying an equity lens on our credit investments. Progress on deployment depends on the timing of settlement on investment opportunities that align with our risk framework and appetite.”
Andrew Schwartz, Group Managing Director (MD) and Co-Founder, Qualitas
This increased capital commitment follows the recently announced A$1bn CRE private credit mandate with A$220m activated commitment on 8 May 2023 and demonstrates the growing interest from institutional investors in the Australian CRE private credit sector.
The proportion of Qualitas’ FUM managed on behalf of local and international institutional investors has increased to approximately 79%.
