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Pepper Property has announced that it has appointed NAB’s long-serving head of institutional property as its new divisional director of capital solutions to help drive its large-scale commercial loan platform.
Andy Balzan, who left National Australia Bank last year following a 33-year career at the major lender, will head up the capital solutions arm of Pepper Property with a particular focus on development finance.
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The real estate investment and advisory arm of the Pepper Group has been building its platform to offer debt and equity solutions across all real estate sectors, particularly focusing on commercial property and developments.
It currently provides large stretch senior development finance and term loans from $50 million to $300 million and aims to build on its range of commercial property finance products under Mr Balzan’s stewardship.
According to the group, this will include first mortgage loans of between $10 million and $30 million for developers in the mid-cap market, as well as flexible term and bridging loans for income-producing value-add and shorter weighted average lease expiry (WALE) commercial assets.
NAB’s former general manager of property and diversified industrials said that the move was needed as the major banks reduce their appetite for development finance, particularly for apartments.
Mr Balzan said: “Pepper Property’s first mortgage platform will look to take advantage of an identified gap in the market, whereby traditional lenders have reduced appetite for term debt and very few non-banks are able to provide debt at competitive rates.”
He added: “There are significant opportunities for Pepper to build relationships with investors and developers and become an active long-term financier in the commercial property sector and a meaningful alternative to the major banks and non-bank property lenders.
“The fundamentals in most sectors of the commercial property sector are good, with strong levels of liquidity, continuing growth in the economy and improving confidence.
“It is a very good time for Pepper to be expanding its platform in the Australian property finance market.”
Nick Jacobson, group head of Pepper Property, welcomed the new appointment, saying: “We are delighted with the appointment of Andy, who has an outstanding track record in Australian commercial property lending.
“He will boost Pepper’s best-in-class, third-party large loan management and servicing and advisory capabilities to continue to provide an end-to-end first mortgage platform capitalised by highly credible, institutional non-bank lenders,” Mr Jacobson said.
Last year, several of the major banks began pulling back on commercial loans, particularly for apartments, amid concern of oversupply in apartment building.
BIS Oxford Economics also suggested last year that the whole of Australia, barring NSW which is “heavily undersupplied”, will be in oversupply over the next three years, with the apartment market likely to face more challenges than the house market as a result of APRA constraints on investor lending (which have now been partially lifted).
[Related: Auswide classes off-the-plan lending as ‘unacceptable’]
