Qualitas Limited, a leading Australian alternative real estate investment manager, has entered into a mandate with a global institutional investor that provides for up to A$1 billion to be incrementally available to Qualitas and invested into Australian commercial real estate private credit opportunities.
The mandate is available for investment in tranches, of which A$220 million is activated and available for deployment as set out below. The balance of A$780 million is subject to further approvals and conditions and there is no certainty that it will be activated in whole or in part. Qualitas will co-invest up to A$30 million over the life of the A$1 billion mandate.
The mandate will be seeded by two residual stock loans (RSLs) for approximately c. A$109 million of immediate deployment with a remit to lend across all CRE sectors. The deployment of the remaining c. A$111 million is subject to usual fund investment criteria and conditions. The mandate increases Qualitas’ total committed funds under management (FUM) by A$220 million (representing the current active component of the mandate) to a total FUM of A$6.0 billion of which 72% is CRE private credit and 77% is invested on behalf of local and international institutional investors.
Andrew Schwartz, Group Managing Director and Co-Founder said “As the alternative lending market continues to grow so does the breadth of product available from alternative financiers. RSLs present compelling risk adjusted returns given the exposure level is typically at a material discount to underlying valuations with a backdrop of strong residential demand dynamics.
The security, stability and quality of Australia’s CRE sector is continuing to draw strong interest from global institutional investors and there is an expanding pipeline of CRE private credit opportunities with an income focus as traditional sources of finance reduce their lending in this sector. However, a partnership of this size requires a manager with a proven track record of delivering strong returns which we have built over 15 years, through multiple real estate cycles.
Qualitas now has significant sources of capital across our private credit strategies to accelerate deployment momentum. The market environment is currently placing a premium on the provision of liquidity and Qualitas is a party with the scale of capital to provide this much needed liquidity. The new mandate means we can continue to capitalise on the continuously increasing opportunities in the market by deploying into attractive risk return investments for the benefit of our investors.”
“We see this new partnership as an endorsement of our business and testament to our expertise in the Australian CRE private credit market and confirmation of our strategy.”
Qualitas takes this opportunity to reaffirm its FY23 guidance of:
- FY23 net profit before tax3 is estimated between $30 million and $33 million
- FY23 earnings per security (EPS) is expected to be between 7.1 cps and 7.8 cps
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