Real Estate Debt Funds

Centuria recently announced a 50:50 joint venture with Bass Capital, an Australian real estate debt and investment manager. The two firms have worked together for over three years and are delighted to offer wholesale investors alternative and unlisted real estate debt funds.

The new subsidiary – Centuria Bass Credit (CBC) – aims to deliver competitive investor returns to wholesale investors and fast, bespoke finance solutions to real estate developers and commercial property owners.

Real Estate Debt Capital Markets

Currently, the unlisted 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.

Why invest with Centuria Bass Credit?

Proven Track Record

• Organic growth has led to a committed loan book exceeding $400m, with substantially more in pipeline opportunities
• Proven historic track record with numerous investments made as well as exits generating highly competitive returns with no non-accrual loans
• Proven capital protection and risk mitigation with more than 94% of loan volumes secured by first mortgage security, with gross average LVR of 63%, LTC of 76% and an average presale debt coverage of 70%
• First open-ended fund – Bass Property Credit Fund (BPCF) – launched in 2020 and investor commitments now exceed $170m.

Investment Strategy and Team

• Deal selection through fundamental credit analysis and deep due diligence. All processes codified into a scalable, unique, best-of-breed loan assessment and management platform
• Proven alpha generation through tactical deal selection, extensive due diligence and active asset management
• Highly experienced team of 16 FTE with institutional grade capabilities, knowledge and industry networks.

To find out more about Centuria Bass, visit www.centuriabass.com.au

Centuria Bass Credit’s Track Record

Lutwyche, QLD Property Type: 38 units Loan amount: $15.2m & $0.4m Loan Type: Senior and Mezzanine Loan Purpose: Construction

Rockbank, VIC Property Type: Residential sub-division Loan amount: $10.2m Loan Type: Senior Loan Purpose: Construction Finance

Carnegie, VIC Property Type: 47 units & two commercial lots Loan amount: $17.0m Loan Type: Senior Loan Purpose: Construction

Piara, WA Property Type: Over-55’s lifestyle village Loan amount $15.2m Loan Type: Senior Loan Purpose: Land refinance and sub-division

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