Private Equity Firms Address Commercial Real Estate Funding Gap as Traditional Banks Pull Back
Private equity firms are stepping in to address a funding shortfall in commercial real estate as traditional banks reduce their lending exposure, with one fund preparing to launch Hong Kong's inaugural listed property debt vehicle.
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According to the South China Morning Post, private equity firm Gaw Capital is increasingly involved in filling a gap in commercial real estate funding because traditional banks are decreasing their involvement in riskier property lending. Private equity firm Gaw Capital has identified a pipeline of deals totaling HK$2.29 billion, which equates to US$291 million, spanning locations including Hong Kong, Australia, South Korea, Thailand, and the Maldives, with most projects targeting internal rates of return of more than 10 per cent per annum. This fund has identified a pipeline of deals totaling HK$2.29 billion, which equates to US$291 million, spanning locations including Hong Kong, Australia, South Korea, Thailand, and the Maldives. The majority of these projects are aiming for internal rates of return exceeding 10 per cent annually.
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