The newest entrant into the Australian commercial lending market has vowed to ramp up competition in the sector and give brokers better alternatives.
Global real estate giant CBRE announced its decision to enter the Pacific lending market on Friday, and CBRE senior director Martin Priestley says it’s high time a new player spiced things up.
“Up until recently the banks have had pretty much a stranglehold on what’s available and we’re going to sit beside them with another offering,” says Priestley.
The lender’s focus will be in the commercial property investment market, beginning immediately in Australia and New Zealand with a view to expand into a number of Pacific Asian countries in the near future.
“This is effectively being driven by clients of ours that are international pension funds and insurance companies and sovereign funds that have an appetite to lend money into the Australian market. We see the maturity in Australia and New Zealand as being sufficiently robust to start lending effectively as of now.”
A key differentiator between CBRE and other lenders will be loan duration – around 7-10 years – and the bank’s preference for fixed rates.
“And that will be a fixed rate as opposed to a rate that is fixed on some sort of interbank rate, it won’t be reset on refinancing terms midway through.”
CBRE will act as local representative and “front end” manager for the loans, as well as handling the management of approval, compliance and servicing throughout the loan's duration.
“Obviously banks dominate the funding as it stands in Australia at the moment and we’re going to offer brokers an alternative, which is wholesale-based non-bank funding,” says Priestley.
“It differentiates from some of the funding that was available from some of the non-banks in the '90s and early 2000s where a lot of that was funded against retail or small wholesale investments. This is really coming from pension funds, who have the funding capacity to be able to offer that sort of money.”
Priestley, who will manage the lender's launch in Australia, has a wealth of experience in the financial services industry, having previously held top executive roles at BankWest
, Ashe Morgan Winthrop and Moss Capital.