Finding the Sweet Spot: How Monark Built its $2bn Property Empire

While many property financiers chase high-profile developments or mass-market projects, Monark Property Partners has methodically built a $2-billion portfolio by dominating Australia’s middle property market—a segment that offers stability and consistent returns even during market volatility. Monark co-founder and chief investment officer Adam Slade-Jacobson ( pictured with chief executive Michael Kark ) says the group has about 55 projects under management. And its investment thesis is straightforward, Slade-Jacobson tells The Urban Developer . “Our focus has always been partnering with emerging and established developers in the middle property market,” Slade-Jacobson says “Our thematic is well-designed boutique residential and commercial buildings that will always have strong demand, particularly within a 10km radius of the CBD.” The company typically targets projects of 20 to 50 apartments with gross realisable values of $20 million to $75 million. This focused investment thesis has enabled Monark to deploy capital across about 250 transactions since it was founded in 2013. Middle market is the ‘sweet spot’ The middle market is appealing because it’s “primarily owner-occupiers, with a strong downsizer component”, Slade-Jacobson says. “These projects are in suburbs with proven demand, underpinned by strong established housing markets [which] provides natural risk mitigation. “We always know that well-located residential projects are always going to sell well, or, if they don’t sell, there’s always a rental market for that product. So, there’s a lot of risk mitigation to that part of the market.” Headquartered in Melbourne, Monark has expanded its footprint. ▲ Monark provided a mezzanine funding solution for this 20-storey, 59 apartment project at Broadbeach on the Gold Coast. “We fund predominantly across the eastern seaboard ... we fund in Sydney, we’ve done projects at Coogee, Bondi, Rose Bay, Vaucluse, Alexandria,” Slade-Jacobson says. “We’ve funded several projects along the south-east coast of the northern beaches of New South Wales and Gold Coast. And we’ve done smaller projects in Perth.” Location quality is paramount when evaluating potential investments, leading to a bias towards areas with the strongest established housing markets because that underpins the value of apartments, he says. &ldquo;Where there&rsquo;s the strongest established housing market because a strong established housing market underpins the value of apartments,&rdquo; he says. --> “Where demand is proven in those areas, you’re looking for good schools, strong amenities, transport and where demand outstrips supply.” Though primarily focused on residential developments, which Slade-Jacobson describes as “the most defensive over the last five years, and the best performing together with industrial”, Monark also finances commercial, industrial and, occasionally, retail projects. Navigating market cycles The current market environment, marked by stabilising construction costs and anticipated interest rate reductions, presents significant opportunities, according to Slade-Jacobson. “It’s [well] documented there is a massive undersupply of housing. We’ve got strong population growth. So residential will continue to flourish and a lot of our development clients are even ready for the next wave of development, and we’re very supportive of that.” He contrasts today’s environment with the challenges developers faced during the pandemic and its aftermath. The property development sector weathered unprecedented difficulties from 2020 through 2023, with supply chain disruptions, labour shortages, and material cost inflation creating a perfect storm for feasibility challenges. “Particularly in Covid times, it was very difficult for projects. It was a very difficult landscape for developers,” Slade-Jacobson says. “Construction cost rises of 35 to 40 per cent is a very difficult proposition for any feasibility to absorb.” These dramatic cost increases forced developers to shelve projects or accept significantly reduced margins. Delete Combined with rising interest rates that constrained buyer borrowing capacity, the market faced a substantial slowdown despite the clear need for more housing supply. The improved outlook for 2025 stems from greater certainty around costs and anticipated monetary policy shifts. “Now what’s happening is that the construction costs aren’t wildly escalating, so developers are able to prepare a feasibility with a lot more confidence,” Slade-Jacobson says. “Hopefully, with a few interest rate reductions going forward and people’s purchasing power becoming greater, there’s stronger momentum in wanting to acquire property off the plan.” Relationship ‘banking’ Slade-Jacobson says Monark takes a relationship-based approach to financing. “The key in this business is relationship,” Slade-Jacobson says. “It’s very difficult for new financiers to come in and expect to gain market share in a particular area of the market.” “We seek long-term relationships, not transactional opportunities. Repeat business allows us to partner with developers to achieve their—and our—long-term aspirations.” Show us the money Monark’s capital structure further strengthens its market position, Slade-Jacobson says. Its primary vehicle, Monark Property Fund, focuses on providing first mortgage funding for developments and land acquisitions. The High Yield Debt Fund series, now in its third iteration after raising about $45 million, enables higher leverage for developers while offering risk-adjusted returns to investors. ▲ Monark Property Partners and Resolution Property Group acquired this 15ha Greenvale infill site in May for $44m, marking their second joint venture. Behind this capital sits a diverse investor base of more than 500 sources. “Our capital comes from high-net-worth individuals, family offices, not-for-profit institutions, super funds, etc,” Slade-Jacobson says. The Liberman family office serves as Monark’s joint-venture partner, adding significant credibility and financial backing. “One of the important parts for our developer partners is that they know that the capital is underwritten,” Slade-Jacobson says. “That’s a really important competitive advantage because it provides capital certainty to our developer partners in a time of great uncertainty.” Outlook and challenges Slade-Jacobson identifies four pillars needed to address Australia’s housing challenges: planning reform, tax reform, labour reform, and government incentives. While acknowledging some progress on planning reform, he’s pushing for greater attention to the remaining areas to stimulate housing development. As Monark continues to execute its focused strategy, Slade-Jacobson remains confident in its approach. “We’ve been able to stick to our core thesis of middle property market has served us very well and will continue to be an active player in that part of the market.”

Finding the Sweet Spot: How Monark Built its $2bn Property Empire

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