- October 1, 2022: Vol. 14, Number 9

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Debt benefits: Accessing private credit opportunities in Australia’s growing commercial real estate market

by Kivanch Mehmet

The commercial real estate (CRE) market is a growing alternative investment class across the globe — and Australia is no exception. Higher interest rates and increasing inflation, coupled with market volatility and hesitancy by traditional funding sources to deploy capital in the CRE space, have only accelerated the shift from the major banks towards alternative financiers.

In this environment of heightened volatility, public markets have persistently delivered low yields, leading investors to consider CRE private credit — a proven investment strategy uniquely positioned to provide reliable income, risk-adjusted returns and portfolio diversification.

Domestic and international investors are increasingly drawn to Australia’s sophisticated CRE market, with several substantial private credit mandates recently handed to alternative asset managers, including by global sovereign wealth funds. They have been attracted to opportunities across all major sectors — office

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