Debt

Refinancing challenges for borrowers in the region can differ widely depending on the market where they are investing.

Asia-Pacific real estate investors with loans to refinance have new pressures to deal with, especially in certain sectors or markets.

Market dislocation means lenders to Asia-Pacific real estate can hit equity returns, say Gaw Capital’s Kenneth Gaw and Foster Lee, but private credit will remain a valid strategy once the dust settles.

The contribution of Asia-Pacific-based firms to PERE’s real estate debt ranking is growing.

Australia’s population growth, combined with the ongoing withdrawal of its banks from commercial real estate debt, is spawning opportunities for alternative lenders, say Qualitas’s Mark Power and Dean Winterton.

CBRE estimates the region’s outstanding senior commercial real estate debt at $254bn as of mid-2023, with a debt funding gap of $5.1bn for loans maturing in 2023-25.

PAG’s Chris Gradel considers the expanding opportunities for private real estate debt in APAC.

Falling asset values and conservative banks are forcing investors to turn to private debt to refinance their portfolios.

Most assets need an additional 15-20% in reserves to address refinancing issues, according to the advisory firm’s co-founder.

German lenders including Deutsche Pfandbriefbank are seeing their share prices impacted by US commercial real estate exposure.