Private Credit’s Biggest Risk in Expansion: Sameer Chopra

One in four residential developments is privately funded in Australia but the forecasts are for an eyewatering expansion.

In this exclusive member-only webinar, CBRE head of research Sameer Chopra explores the growth of the private credit market in real estate.

Chopra says the industry has experienced strong tailwinds, growing about 7.5 per cent a year.

It makes up 25 per cent of residential development lending and about 4 or 5 per cent of commercial development lending, Chopra says.

“One in four projects are privately funded,” Chopra says.

“Private credit has been very helpful in that residential build-to-sell market and they’re quite happy to lend into that industry.”

There are a few other key areas where private credit is starting to lean in with higher loan-to-value ratios and lower loan cover ratios required.  

“Banks and non-banks can work really well together to make sure that funding is available and it’s available at the right price for development, using both in combination across the debt stack,” he says.  

“It’s a good symbiosis in the industry.”

In this presentation, Chopra explores:

• Risk and return profiles

• Outlook on private credit

• Fundamentals driving growth

• The biggest risk in the private credit market to be aware of.

Chopra also discusses the CBRE house view on the outlook for both the residential and commercial sectors in the near term. 

To access this exclusive presentation, click here.