Kokoda Property has made a $120 million deal with global investment firm Goldman Sachs to fund the construction of its "Chester and Ella" residential project in Newstead, Brisbane.
The deal is one of Brisbane’s largest non-bank funded deals secured over the past 12 months, and Goldman Sachs’ first deal over $100 million in Brisbane.
The Newstead site was the first Brisbane acquisition by Melbourne-based developer Kokoda property -- buying the site for $18 million in July 2016. The developer also acquired a $12.5 million development site in Milton and a $9.5 million DA-approved riverfront purchase in St Lucia.
Earlier this year, the developer dismissed concerns of an oversupply in the Brisbane residential apartment market as "overplayed".
[Related reading: Brisbane Apartment Prices To Fall As Correction Looms]Goldman Sachs’ entry into residential and commercial property lending comes as APRA’s clampdown on the big four banks’ lending habits is reducing the ability of developers to move their projects forward.
[Related reading: APRA Signals Lifting Of Intervention After An ‘Erosion’ Of Standards]Following the pull back from Australia's major banks, Kokoda's deal with Goldman Sachs is not the first Brisbane development that has sought international funding.
Earlier this year, Metro Property Development negotiated a $90 million loan with Hong Kong-based hedge fund OCP Asia in order to complete construction on Metro's "Capri" tower in Newstead.
Kokoda Property's "Obsidian" residential development in Milton, in Brisbane's inner-cityKokoda Property’s director of capital and investment Rick Impala said the US Investment bank’s decision to partner with Kokoda was confirmation of its alignment with well-credentialed local developers -- filling the void left by the big four banks.
“The regulatory restrictions imposed on the major banks in recent times has opened new opportunities. However, there is no question that the level of due diligence, credit review and documentation performed by Goldman Sachs was as robust and thorough as compared to what would otherwise be exercised by a major bank,” Impala said.
Kokoda Property founder and managing director, Mark Stevens maintained his support for Brisbane as a "robust market".
“International players are realising what astute developers in Australia already know – the property market in Brisbane is underrated, and it is the city to watch.
“There is currently over $40 billion worth of public and private infrastructure planned for Brisbane, including the $1.3 billion Brisbane Airport second runway, the $1.5 billion Metro Transport System, and the $3 billion Queens Wharf project, all of which marks an incredible transformation that will come to fruition in the next five to ten years.
“High-end developments with a design-led approach are contributing towards this transformation so we are proud to be actively developing in what is one of the most exciting times in Brisbane’s modern history.”