Chinese investors flock to non-banks

by Julia Corderoy16 Sep 2015
Chinese property investors have flocked to non-bank lenders following the tightening of the major bank’s lending practices, with a non-bank lender reporting an 86% growth in commercial property finance to Chinese investors in the second half of the year so far.

New non-bank lender, Chifley Securities has provided $65 million in commercial property development financing to Chinese investors since June 30, compared with $35 million provided in the first six months of 2015.

“We are seeing strong growth in inquiry levels as the banks are tightening their policies and funding for new developments,” Chifley Securities’ director Joe Morello said.

“The banks’ moves have proved to be a boon for non-bank lenders as we are seeing strong deal flows amongst clients, who are financially strong with good projects, but have hit a brick wall with the major banks.

“We and other non-banks are filling the void with funding for largely Chinese families who want to build their land banks and develop small and large commercial and retail centres.”

The non-bank now expects the value of approved loans to surpass the $500 million mark for 2015 calendar year. 

The group’s initial lending pool has now grown to $700 million, with its high net worth individuals now achieving average annualised returns of over 11.5%.

Chifley Securities now has 2,000 accredited brokers and has generated more than $2 million in fees to them over the last six months.

Foreign investment in Australian property has come under much scrutiny over the past year, even spearheading its own parliamentary inquiry. Last month, Australian Broker reported that the federal Treasury agreed with the inquiry recommendation that more needs to be done to crack down on third parties, such as brokers, who assist in the breaking of Foreign Investment Review Board (FIRB) rules.
 

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