APG has made its first foray into real estate debt within Asia Pacific via dedicated Australian commercial real estate debt manager, MaxCap Group (“MaxCap”). This is a new partnership for APG, who have made an initial commitment to the strategy of €185 million with a further re-up option to increase total commitments to €370 million. The partnership will target first mortgage stretch-senior loans, with a focus on construction lending across multiple real estate asset classes. Initial capital has already been deployed to the first seed loan, which is a mixed-use development in Melbourne.
APG has successfully pursued real estate debt strategies in Europe and US for over five years and expects to deploy further capital into such strategies across the Asia Pacific region.
In a statement announcing the transaction Graeme Torre, Managing Director and Head of Private Real Estate, Asia Pacific, said:
“As a pension investor, we are continuously looking for attractive investments worldwide that help us realize stable and long-term returns for our pension fund clients. We see the structural shift in the Australian banking sector market dynamics contributing to a convergence of equity and debt returns. A real estate debt strategy therefore offers us the opportunity to access this asset class with an appealing risk /return proposition. We believe that MaxCap, with its on-the-ground knowledge, reputation for responsiveness and proven track record, will be a strong long-term partner for APG.”
Wayne Lasky, co-founder and Managing Director of MaxCap group stated “We are delighted to partner with APG on this scalable and sustainable strategy. CRE debt as an institutional asset class in Australia is in an early cycle and we’re looking forward to a long-term relationship with APG to deliver strong risk adjusted returns for its clients and their members.”
The investment was done on behalf of ABP, SPW and PPF APG.
Read the press release here.