Goldman Sachs is the latest US investment bank to enter the Australian non-bank commercial real estate debt market, and has plans to ramp up its lending in the sector over the next few months, IPE Real Estate understands.
Industry sources told IPE Real Estate that Goldman Sachs was one of two North American institutions to place a total of AUD280m (鈧�187.8m) early this month through MaxCap to finance a large mixed-use project in Melbourne known as Swanston Central.
At the time of the announcement, MaxCap declined to reveal the identity of its investors, but industry sources have since confirmed that Goldman Sachs contributed 50%, or AUD140m, of the facility.
A leading commercial real estate debt provider said: 鈥淲e believe Goldman Sachs is also behind the financing of a project in Brisbane, but we do not have the details.鈥�
Another provider said: 鈥淕oldman Sachs has not indicated a quantum of what it hopes to lend to the Australian real estate sector, but one would imagine it has a vast balance sheet.鈥�
The source said the US investment bank could lend $1bn but had the scale to go beyond that. 鈥淯ndoubtedly, it is convinced of the investment thesis in the Australian debt market, which still offers investors outsized returns for those who pick the right opportunities,鈥� the source said.
鈥淲e think Goldman Sachs is targeting opportunistic segments of the market, and looking for large deals,鈥� a debt fund manager told IPE Real Estate. However, he said his firm would probably consider that this type of financing carried 鈥渕ore risk鈥�.
Goldman Sachs is understood to be compensated for risk with a higher interest rate.
鈥淭he Goldman Sachs money was more expensive than our rate for loans of this type,鈥� one industry player said.
Dislocations in the Australian market are throwing up pockets of lending opportunities, industry sources said, in particular within residential development projects, as well as opportunistic investments.
In recent months, leading asset manager Blackstone as well as one of the world鈥檚 largest sovereign wealth funds have been among those entering the Australian market.
The was offered on a 鈥渟enior-stretch loan on a peak debt basis鈥�.
Wayne Lasky, MaxCap鈥檚 managing director, were outside those on which Australia鈥檚 major banks are currently able to fund.
Lasky today declined once more to confirm the identity of his clients.
The Melbourne project, with 1,093 apartments, is being developed by an Australian Chinese group known as Hengyi, which is affiliated with mainland Chinese group, Shangdong HYI.
