A fresh wave of capital from non-bank lenders has continued to pour into real estate debt markets across the post-Covid era.
Finance house MaxCap Group has dipped into the Melbourne development market once more, providing the construction facility for a $250 million residential development set to be built in the city’s inner-eastern suburb of Hawthorn.
MaxCap, alongside Goldman Sachs, will invest in Melbourne-based developer JD Group’s "Sierra" residential apartment project, located at 200 Burwood Road, which is set to be constructed on the site of the former Going Going Green nursery.
The project, which has been selling since last year, will comprise a mix of 240 one, two and three-bedroom apartments over a single building of six levels.
The development, set to be built in a unique S-shaped footprint—in order to shield apartments from one another, will feature 1,000sq m of commercial and four retail tenancies.
It will also offer residential amenities including residents’ dining room, courtyard garden, pool, BBQ and a large rooftop deck.
The project will also sit within close to the vibrant Glenferrie Road shopping amenities and public transport options.
The developer has completed a number of projects across Melbourne, starting with small to medium-density developments before transitioning to larger scale, high density.
In May, JD Group delivered JD The Seasons, a 311-apartment project in East Doncaster and is on track to complete its 233-apartment project in central Melbourne, The Victoriana, early next year.
The construction facility between MaxCap and JD Group for its Hawthorn project follows previous construction and land acquisition projects.
The apartment development pipeline, which has been dwindling over the course of the year, recently has begun to pick up with housing approval figures for September lifting by 12 per cent.
Approvals of detached dwellings, which account for about two-thirds of the total rose 8 per cent and attached dwellings—apartments, townhouses and semi-detached homes—jumped 20 per cent, the first monthly gain in five months, Australian Bureau of Statistics figures showed.
MaxCap has been quick to move during the downturn, securing finance for a number of projects across Melbourne.
In August, MaxCap partnered with an undisclosed Hong Kong-based institution to provide $170 million in construction financing on a 396-unit mixed-use project in Melbourne’s eastern suburb of Box Hill.
MaxCap followed up that deal with the provision of construction funding to Milbex Group for a $120 million 20-storey mixed-use residential building in South Melbourne.
The CHT-designed tower, to be known as Park Avenue, comprises 160 apartments with a mix of one, two and three-bedrooms and two retail units.
Another developer turning to non-bank lenders is Melbourne-based Tim Gurner, who in September struck a $150 million equity partnership with private real estate financier Qualitas to help grow its existing $5.7 billion portfolio.
Gurner said the equity would be used to acquire new development opportunities in Melbourne, Sydney, Brisbane, Perth and across the Tasman.