This article was produced in partnership with Stamford Capital.
Stamford Capital has overcome the challenges of the last two years in the commercial real estate landscape and is once again seeking insight from lender partners on their view of the state of the markets within Australia.
The commercial finance brokerage, which provides property developers and investors with access to different financing options and advice, releases an annual commercial real estate lenders survey with the 2021 results revealing the opportunities and concerns of people within the industry.
Last year’s Debt Capital Markets Survey, released in March 2021, revealed 71% of lenders expected non-banks to increase their activity in the investment loan market, while 40% believed they would decrease investment margins. It also revealed there was strong appetite for commercial property finance across the country, and more subordinated-to-bank construction lending would be occurring, while Australia’s regulatory requirements with major banks were less likely to loosen lending criteria, with non-bank and private lenders filling the gap.
Last year Stamford Capital also saw strong competition amongst lenders to win the deals, resulting in more aggressive leverage and flexibility around debt cover for presales. Now Stamford Capital is interested to know how markets have changed over the past year and is urging commercial lenders to take part in the 2022 survey, which closes on 21 March.
Lenders can fill out the survey here: http://ow.ly/sTqh50HZOAE
This year, Stamford Capital is donating $20 for every survey completed to Beyond Blue, giving lenders an opportunity to give back by simply offering their views.
Founded in 2010 by Domenic Lo Surdo, who leads the commercial finance brokerage in partnership with joint managing director Michael Hynes, Stamford Capital is geared to cover all facets of the market including banks, non-banks, and private lenders, assisting clients with commercial property investments and retail, industrial, commercial, and residential development.
Hynes, who has over 25 years’ experience in commercial property investing says he sees the benefit of the current market.
‘’We have seen the growth in most property asset classes due to low interest rates making it attractive for investors. Retail investment follows the same metric with cheaper mortgages and a huge growth in residential pricing. The standout sector currently is the industrial space,’’ says Hynes.
He says the industrial asset class is seen as the most indispensable – it has more of a buffer because it serves the e-commerce and modern economy sectors.
‘’Other asset classes have come through OK, however people are aware there are fundamental issues in this adapting climate and modern economy.”
After working with clients across the competitive commercial real estate market, Hynes says the prime markets are hugely sought after by institutional investors.
‘’Suburban markets within major cities along the eastern seaboard are performing very well. Last year Stamford Capital invested in an industrial unit development in Byron Bay. The location is a standout example with the flood of people opting for a sea change with industries wanting to put roots down in regional areas. The Byron market is fairly constrained and will not suffer from a huge volume of competitive supply. With minimal land available for development, it makes for an appealing location for Stamford Capital to invest.’’
Classifying themselves not as lender but an ”arranger”, Stamford Capital can enhance clients’ knowledge of the debt capital market.
Throughout his career, Hynes says he has never seen such a diverse market as the one operating now, with strong competition amongst lenders and non-banks.
Stamford Capital works with clients end-to-end. It also re-engineers debt for existing clients, with over $2 billion transacted during the last calendar year.
‘’With the average loan size of $11 million across the board, the strong market we are currently experiencing, we are fortunate our business is well positioned and equipped to handle this competitive market, ’’ says Hynes.
Looking forward to the year ahead, Hynes says there are a “few clouds we need to be mindful of”.
“These include current economic factors, the greatest geopolitical risk we have ever seen, along with interest rates hitting their lowest point with the expectation they will rise due to inflationary pressures.”
Hynes says he appreciates how special Australia is given our location and remoteness from other countries.
‘’Our economy is good. We have solid social infrastructure and an attractive place on the global scale which you can see through international immigration.’’ What will Stamford Capital see in their survey results this year?
You can read the 2021 survey findings here: Real Estate Debt Capital Markets Survey 2021
Learn more about the company: Stamford Capital
Michael Hynes is the Joint Managing Director of Stamford Capital. He has over 25 years’ experience in property finance, investment, development and capital syndication. Prior to Stamford Capital, he worked at Savills and before heading up principal investments at AsheMorgan.
