Qualitas has raised $500 million of institutional capital, closing the first fund of a multi-billion construction finance programme. The fund furthers Qualitas’ rapidly expanding real estate debt strategy, providing a much needed alternative source of capital for residential and commercial development projects.
Real estate investment management firm Qualitas announced today that it has raised $500m of institutional capital for the first fund of a multi-billion dollar construction finance programme that will provide loans of up to $125m for residential and commercial development projects.
The closed-end fund is a core part of Qualitas’ rapidly expanding real estate debt strategy that fills a gap created by a pull-back in bank lending. The new fund will provide capital at a loan-to-value ratio of up to 75% for projects that meet its robust risk assessment criteria.
Andrew Schwartz, group managing director of Qualitas, said investors are stepping in to provide fresh capital to the development sector, at a time when banks are reducing their lending activities.
“Qualitas has a long history of providing an alternative source of capital for quality projects backed by reputable developers. Our new construction finance fund will provide a much-needed source of capital to developers in a tight credit market, with a focus on quality projects in East Coast capital cities,” Mr Schwartz said.
“With Australia’s growing population and the very tight vacancy rates in Melbourne and Sydney, we are especially focused on these markets to provide much needed debt capital to quality projects,” he said.
Tim Johansen, Managing Director, Real Estate Finance at Qualitas, will be responsible for the construction finance fund and has appointed two senior banking figures in order to expand the team.
Mark Power joins as Director, Real Estate Finance, following 17 years at NAB, where he was most recently Director, Corporate Property Vic & Tas. Gil Norwood joins as Director, Real Estate, where he was most recently Director, Institutional Property Vic at ANZ, where he worked for nine years, and prior to that he was at CBA for seven years.
“We are pleased to have two senior bankers, Mark Power and Gil Norwood, join our team and use their skills, experience and networks to help drive the success of the construction finance fund. The new fund will allow us to expand the positive relationships we’ve built with developers to date,” Mr Johansen said.
The fund announcement follows a period of strong growth for the diversified real estate investment firm, established in 2008. Qualitas manages a range of debt and equity funds on behalf of institutional and high-net-worth investors and invests in core, opportunistic and value-add assets which are managed in-house.
Mr Schwartz said the diversified nature of the Qualitas business gives it a unique perspective in the market.
“As both a lender, and an equity provider, we understand the challenges of the development process as well as the factors that make it successful.
“Our approach is focused on finding quality projects that make sense for the market conditions, are focused on the end-occupier and have a robust risk management approach. “When we find partners who meet those criteria, we build long-term relationships with them and often work together on multiple projects,” Mr Schwartz said.
He added that balancing the needs of both investors and development partners has been key to Qualitas’ success.
“Our investors recognise that deploying their capital with Qualitas provides them with strong, risk-adjusted returns, while developers welcome this alternative source of funding to progress their projects,” he said.