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Centuria Bass have a wealth of history and expertise in providing credit facilities to borrowers which are secured against property, typically with senior ranking (i.e. first mortgage security). These property development projects are across a range of sectors and locations, providing attractive, risk-adjusted returns for investors as they form the basis of our commercial real estate debt (CRED) fund(s).
See below the latest investment opportunities available including our open-ended product, the Centuria Bass Credit Fund.
Currently, the unlisted commercial real estate debt fund market is focused on senior loans, as the major banks have tightened their lending criteria. Senior loans are first in line to be repaid at expiry of the loan or where the loan is enforced while mezzanine is the last. Therefore, senior loans are considered less risky and consequently pay a lower return.
From a borrower’s perspective, these types of loans are increasingly prevalent and are often referred to as non-bank lending. Currently in Australia, the big four banks dominate all lending with more than 75% market share1. However, in the US, bank finance accounts for less than 40%2. We could see this trend from non-banking finance lending replicated here in Australia.
1. According to the Australian Government Productivity Commission’s Competition in the Australian Financial System, Productivity Commission Inquiry Report Overview and Recommendations (No. 89, 29 June 2018).
2. According to the US Federal Deposit Insurance Corporation (FDIC) Quarterly – Bank and Nonbank Lending over the past 70 years, Chart 1
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