Non-bank lender Chifley Securities has increased its loans to developers and builders by 35 per cent in the year to June 30 taking its loans to $638 million, compared to the last year’s annualised figure of $471 million.
The company which started about 20 months ago already has a high number of borrowers on its books, particularly Chinese and foreign developers who were unable to obtain funding from local banks.
It has issued loans of $1 million to $50 million for first mortgages and mezzanine, bridging and construction finance particularly to developers that have a large component of foreign pre-sales, which did not meet big four lending criteria.
The fifth bank
“Private lending groups, including Chifley Securities are becoming known as the fifth major bank, with more investment funds entering this sector chasing higher returns, while being secured against property projects being financed,” Chifley Securities director Joe Morello said.
“Despite the historic low interest rates and demand from buyers, the banks are becoming much more difficult to deal with for developments.”
Just as there were many developers chasing funding, there were just as many funders particularly private equity, hedge and superannuation funds looking for higher returns of more than 10 per cent from property finance through non-banks such as Chifley Securities, Mr Morello added.
During the year, Chifley Securities also launched a property development division involved in medium density residential developments in Sydney’s west, Melbourne and other major cities.
