New non-bank players entering Australian commercial lending market
In the past week, two groups have announced they'll be setting up shop in Australia, aiming to provide alternative 'non-bank' funding to the commercial property market.
First out of the blocks was TIAA Henderson Real Estate, a multi-line business with big real-estate investment and operations in the UK and the US and expertise across a range of disciplines, including the ability to invest equity directly into commercial real estate, or to go via loan origination.
TIAA Henderson's commercial real estate debt team in the UK has origination, structuring, execution and portfolio management capabilities. To add to its undoubted offshore real estate expertise, the US$70 billion giant (looking to ramp up its operations across the board in Australasia and Asia) lured Stephen Philp, former Head of Challenger's Capital Transactions team to head up Capital Transactions at TIAA.
At a media presentation, Philp said his firm would either use its clients' money, or its own considerable balance sheet for loans.
Philp was very coy when asked what his first loan would look like, however, and backed away from suggestions he would be looking to take market share from banks.
Then, earlier this week came news via a PR firm that "three experienced finance executives have formed a new non-bank finance group in the commercial property market, with an initial lending pool of A$480 million."
Finance veteran Dominic Lambrinos and the principals of Nationwide Capital, Domenic and Joe Morello, have established Chifley Securities to provide a commercial lending alternative.
Chifley Securities intends to work closely with the estimated 12,000 plus mortgage brokers in Australia, delivering them and their clients a timely and efficient loan facility.
Lambrinos, who has over 30 years' experience in finance and is also the owner of EasyBiz Finance, said: "We are now offering loans in the commercial property market from $2 million to $30 million to borrowers, who want to access a quick and a hassle free process."
The company will offer attractive commissions to brokers who bring deals to them, while financing costs will range from 8.5 per cent to 12 per cent a year.
Domenic Morello said the majority of his firms' funding was coming from Australian private investors, with the balance from European and Chinese investors.