Non-bank lender Central Real Capital has doubled its existing warehouse lending facility with Balmain Corporation to $200 million.
CRC says this new lending capacity will meet surging demand for project finance from property developers and investors, coupled with a planned injection of $100 million in additional private capital from CRC founder Tony Denny.
The expanded warehouse line strengthens CRC’s position as a non-bank development finance lender with total financing capacity of more than $500 million expected by July 2023.
CRC CEO David Stone (pictured above) said CRC was delighted to be extending its partnership with Balmain Corporation to support its fast-growing lending platform.
“Strong developer activity coupled with nervousness from mainstream banks is driving increased levels of enquiry,” Stone said. “Put simply, borrowers want private lending that is reliable.”
Stone said banks had a role to play in financing developments, but they faced constraints that private lenders don’t.
“The combination of our institutional funding and the backing of a highly committed private balance sheet – $500 million in total – gives us a flexibility, depth and nimbleness that many other lenders can’t match,” he said.
“We see an enormous opportunity to build on our existing platform to become the pre-eminent private provider of development finance in Australia.”
CRC founder Tony Denny said the capital boost coincided with CRC reaching the significant milestone of $500 million in total loans written since commencing operations two years ago with $200 million of its private capital.
“CRC specialises in financing developments in the early or pre-construction phase, where traditional banks are often unable or hesitant to participate,” Denny said. “Underlying collateral can include land with or without a DA, residual residential stock, selected non-residential construction, retail, commercial and industrial assets.”
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Denny said with typical loan terms of up to 12 months, CRC acted as a financial bridge enabling a borrower to advance their project to a point where it could be refinanced by a bank on more conventional terms.
“CRC is filling a gap in the market for debt funding of up to $20 million tailored to the specific needs of mid-scale commercial or residential developments,” he said.
“We are seeing a lot of projects that are highly bankable but do not sit within traditional bank lending models, even more so as credit markets and bank lending criteria tighten. With $500 million in loans written within two years, our approach clearly is resonating.”
Denny said there was room for private lenders that were nimble who understood and could move quickly to meet developers’ funding needs and who were reliable.
“Since writing our first loan in 2020, CRC has lent to more than 50 development projects, advancing an average of $8.3 million with an average loan tenure of 12 months,” he said.
“Projects financed by CRC have included fast food outlets in Queensland and regional New South Wales, the acquisition of an amalgamated site in Newport and residential subdivision projects in Sydney’s northwest and southwest growth corridors.”
