Executive Summary

• Regulatory changes and current cyclical factors (high rates, softening values, maturing loans) have expanded Australian opportunities for non-bank lenders.
• There are three distinct investment opportunities for non-bank lenders: gap financing, senior development loans and value-add financing.
• APRA's stricter regulatory capital framework requires banks to hold more capital reserves, thereby limiting their appetite for high-capital-charge loans.
• Australia's lender-friendly legal system, with straightforward mortgage perfection and enforcement, provides a transparent and supportive framework for non-bank lenders.
• Australia's mature and transparent commercial real estate market with low volatility offers stability and growth, driven by demographic trends, a supply-demand imbalance and resiliency in values, with rental growth expected to drive the next cycle.