This week it was reported that an Australian commercial property owner will receive nearly a billion dollars in lending from the Challenger Financial Services Group Ltd. The transaction will take place over the next year and comes at a time when many are avoiding the market.
Over the past six months the investment manager has already received half a billion dollars in debt, which has been secured by retail, industrial and commercial buildings. In addition, there were also bonds, backed by mortgages, which were factored into helping companies to refinance.
Australia’s commercial real estate market is reportedly still weak. Since the 2008 peak, the prices have slipped some 40 percent and the banks in the country are planning to force commercial property building sales, which will help to improve their overall financial books.
It is reported that the Challenger group is making this strategic lending move in the Australian commercial real estate market as a result of so many cut backs from foreign lenders. While others have pulled back from investing, they see stepping in as a sound financial move.
Based in Sydney, the Challenger company lent the Goodman Group $250 million in May 2010. The loan was for commercial mortgage-backed securities that were maturing. Further, it is report by Fitch Ratings that $2.4 billion this year of commercial mortgage notes will come due in Australia.
It has also been reported that Challenger Financial Services Group won a mandate from the Australian Super pension fund of $200 million, which was to be used for leveraged buyouts and real estate investments.