Dutch pension fund APG completes $600 million MaxCap agreement

“There’s heightened volatility and heightened risk and more challenges in the public markets, so increasingly more investors and borrowers are looking to us.”

But it is not clear how quickly APG will increase its funding placement again. Mr Lasky gave no time frame, simply saying the commercial intent was to continue to build the partnership between APG and MaxCap and accelerate delivery off the back of the past three years.

In a statement, Hong Kong-based Graeme Torre, APG managing director and head of real estate for Asia Pacific, said the pension fund was pleased to deepen its partnership with MaxCap.

“Commercial real estate debt, as an institutional asset class in Australia, is a proven strategy that offers strong risk-adjusted returns for the benefit of APG’s pension fund clients and their participants,” Mr Torre said.

Higher borrowing costs and inflation are slowing the pace of deals in commercial property. Deal flow fell by more than one-third to $15.2 billion over the first half of calendar 2022, CBRE figures last week showed.

But in the development space, clients were increasingly gravitating towards non-bank lenders, Mr Lasky said.

“Borrowers are starting to shed their concerns about price in recognition of certainty and the flexibility that private non-bank funding can offer,” he said.

Investors were also looking for fund managers able to operate in more difficult times, he said.

“What those investors are looking for is managers able to source their own deals with high-quality operators in the market and those with proven institution-grade platforms that they can underwrite through the cycle and deliver excess returns,” Mr Lasky said.