Pallas Funding Trust underwrites $100 million in transactions over summer

Leading Australian specialist property lender Pallas Capital has deployed over $100 million in the summer months through the Pallas Funding Trust (PFT).

PFT was deployed on a diverse mix of loan types to completed residential projects, future development sites and investment properties across locations in Sydney, Melbourne, Adelaide and Brisbane. Some of these loans included an industrial property in Western Sydney, a recently completed apartment project in central Adelaide and a portfolio of residential investment properties in New South Wales.

“PFT has been seeded with a portfolio of high-quality loans in the three months since Pallas Capital commenced the program. Our broker and borrower clients see Pallas as an attractive alternative to the banks, given PFT’s competitive interest rates, flexible leverage options and market-leading service proposition,” says Steve Lawrence, Executive Director of Lending, Pallas Capital.

He adds, “Our brokers have full confidence that Pallas Capital delivers in a lending environment that is fraught with over promising and under delivery. All of these factors will see demand for PFT and the suite of Pallas Capital products continue strongly with 2022 predicted to be a record year for lending volumes.”

The record performance over the summer quarter demonstrates robust appetite in the market for the loan types that PFT specialises in. Pallas Capital expects this demand to accelerate, through its strong relationships with brokers and borrowers that specialise in the mid-market CRE space. While all PFT loans are secured by a registered first mortgage, Pallas Capital will also look to provide additional funding through its other products, such as the Pallas High Yield Fund that makes second mortgage loans. Pallas Capital’s comprehensive lending strategy will give qualifying borrowers access to additional flexibility on their debt structuring.

PFT is a lending vehicle that was established by Pallas Capital in November 2021. It had a total funding of $530 million approved by its funding partners, Pallas Group and an International Bank. PFT lends money on a range of pre-development loans, residual stock loans and investment property loans, with loan sizes ranging from $1 – $15 million. PFT specifically caters to medium-sized CRE borrowers who are under-serviced by the major banks.

Pallas Capital is one of the fastest growing structured property investment arrangers in Australia, offering brokers and developers lending solutions that are tailored to their needs. It offers borrowers five core loan types that includes acquisition, construction, residual stock and vacant land loans, along with the flexibility to negotiate LVRs and level of pre-sales for construction loans.

The business manages funds for loans secured against non-specialised property assets with values between $1 – $50 million in major metropolitan areas. Sophisticated investors are offered investment opportunities providing fixed rate returns ranging from 5.5% p.a. in the Pallas Short Term Fund to 6.75% p.a. (first mortgages) and to 15% p.a. (preference equity). Pallas Capital’s loans are supported by detailed due diligence on the borrower, a realistic and multi-faceted exit strategy, and active management of all loans by the Pallas Capital team throughout the term.

Pallas Capital and developer Fortis form part of Pallas Group, a business that provides specialist investment, lending and development solutions in the boutique property market in Australia.

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