March 31, 2020
Given the extraordinary and dynamic times in which we currently exist, Stamford will provide weekly short form updates on debt capital for Australian real estate investors and developers via email, LinkedIn and Twitter feeds.
We promise to wind back output once markets stabilise. We also intend to re-run our annual Debt Capital Markets survey later in the year, should make for an interesting comparison to the data set we were due to release a little over two weeks ago.
Our key observations over the last week:
- Capital up and down the stack remains at play, in particular senior debt from the local banking market.
- Some lenders are seeing the opportunity to take on prime clients, those capable of taking on higher
leverage on certain assets, in many cases to support other assets with current or looming income
- That said the bias is towards looking after existing customers, we have the acronym running now of NNTB – “No new to bank”.
- A greater percentage of the non-bank market has frozen, mainly to take stock of the market but some are seeing themselves over exposed to construction projects which are now facing both delivery and market risk.
- The subordinated debt market has essentially frozen, mezzanine capital that is playing is seeking equity type returns.
- Valuation of assets is a challenge but we are seeing the profession look to adapt practice and methodology accordingly.
All Stamford State offices remain open but working remotely.
Wishing you all well
Your certainty in property capital