July 2019

AustralianSuper’s Giant Step into Non-Bank Lending

AustralianSuper has taken one of the largest steps to date into the growing gap left by Australia's big four banks, with investment manager MaxCap arranging a $360 million deal for the local super fund to develop Brisbane's new home for mining giant Rio Tinto.

AustralianSuper is the sole debt funder of the Midtown Centre in the Brisbane CBD, which will develop 45,000 sqm of office space by joining two existing towers into a single 26-storey tower, under a Fender Katsalidis design that creates a new role for older buildings with floorplates too small to meet modern demands.

But while the redevelopment of the former Health and Forestry House buildings at 155 Charlotte Street and 150 Mary Street marks a step forward in the reuse of existing office buildings, the financing arrangement also marks a step change by non-bank lenders into what MaxCap estimates will grow to a $50 billion funding gap in the $288 billion commercial real estate debt by 2023.

"At a level of greater than $360 million, this is possibly the largest single hold for development finance ever in Australian history and represents a watershed moment for the non-bank finance industry”.

AsheMorgan and DMann Corporation are developing the project, with cornerstone investor Hong Kong-based Peterson Group.

AsheMorgan Principal, Mendy Moss, said “we appreciate the focused and professional support of the entire MaxCap team in organising this facility which provides all the funding necessary to complete the project and allows the AM/DMann team to focus on delivering this landmark development”.

See original article: https://realassets.ipe.com/australiansuper-issues-australias-single-largest-non-bank-property-debt/10032322.article