Consultations are under way this week between federal Treasury and property development companies and real estate trusts as the parties establishing the Australian Business Investment Partnership, the
Sydney Morning Herald and Financial Review reported.
The proposed ABIP - which is still being worked out in detail and is also, presumably, subject to parliamentary approval - will allow the fund to sell up to $26 billion in government guaranteed bonds on top of $4 billion in government and bank capital (itself all debt funded). ABIP will invest the funds at its discretion in the debt of major property projects and work as a backstop to the withdrawal of foreign banks from the Australian market.
Australian banks may also be increasingly reluctant to lend against commercial property. Suncorp said two weeks ago it would pull out of property development undertaken by large corporates.
The AFR also reported research circulated yesterday by Goldman Sachs JB Were that suggested that Commonwealth Bank and Westpac were the most wary of financing commercial property among the four major banks. The investment bank suggested ANZ was the most willing lender to the sector, but at hefty margins.