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The specialist commercial real estate lender has announced its sixth institutional warehouse facility.
Commercial real estate (CRE) financier Pallas Capital has launched a $185-million construction warehouse facility, backed by new funding lines from an unnamed Australian bank.
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The non-bank lender said that while it was its sixth institutional warehouse facility, it marked the first specifically designed to fund construction loans by Pallas Capital (previously these loans were funded by monies managed by Pallas Capital on behalf of private investors).
Pallas said the facility will provide flexible funding options tailored to meet the increasing demand for construction finance.
The company said that it could now approve construction loans up to a certain threshold without requiring bank sign-off, giving an unprecedented level of autonomy compared to previous structures. The change gives brokers and their clients more certainty and allows Pallas to move at a quicker speed for construction finance, it said.
Dan Gallen, Pallas Capital executive director and chief investment officer, said: “In an increasingly complex and challenging environment, the launch of this construction facility represents a major step forward in ensuring developers have the capital they need to bring projects to life.
“We are pleased to collaborate with a leading Australian bank on this initiative, reinforcing our commitment to supporting property developers with reliable and cost-effective funding for their projects.”
Jason Arnold, Pallas Capital’s group executive of origination, said: “This move marks an important milestone in Pallas Capital’s broader growth strategy. It reinforces our innovation and leadership in bringing new lending product to the local CRE debt market – particularly for property developers and their brokers.
“By offering bespoke loan structures tailored to each client’s unique objectives, we are helping ensure critical projects, particularly new residential developments, get off the ground by bridging the funding gap in this market segment.”
The announcement follows Pallas’s most active quarter to date, with $807 million in new loan settlements in the December quarter.
To date, the firm has settled 949 loans, totalling over $7 billion across Australia and New Zealand. Construction lending currently comprises over 40 per cent of Pallas Capital’s total loan book.
Pallas Capital manages funds invested in commercial real estate loans up to $50 million secured against property assets in major metropolitan areas. Wholesale investors are offered investment opportunities providing fixed or variable rate returns supported by loans on single property assets or through ‘warehouses’ that invest in a pool of such loans.
Last year, Pallas expanded its team amid the broader growth of non-bank lenders in the commercial real estate sector, with data from Knight Frank showing that over $14.8 billion of private capital was invested in Australia’s commercial market in 2023, the highest share on record.
[Related: Pallas Capital bolsters origination team to support CRE lending]
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