Greater Geelong is officially booming: its population is expected to double in the next 25 years as “Geechangers” swap life in Melbourne for the space, affordability and sublime beaches of the capital’s western corridor.
In Mount Duneed, on Geelong’s southern fringes, property prices have more than doubled in the past five years: from an average of $364,905 in 2018 to $854,823 in 2022, according to CoreLogic RP Data.
That’s just one of the reasons PropertyShares, as a specialist in real-estate loans, recognised the region’s significant potential.
“We see suburbs like Mount Duneed as solid growth hotspots due to infrastructure development in the area, such as the South Geelong Station upgrade [itself part of a $1 billion revamp of the Geelong line] and retail investment,” says William Colebrook, PropertyShares’ Head of Investor Relations.
Last year, the company backed a land development of 170 lots, where the appeal for investors was multi-pronged: a short-term (12 months), high-yield (8.9 per cent) investment with an experienced developer; strong debt cover (131 per cent) from qualified presales; and a building contract and project feasibilities confirmed by independent quantity surveyors – all in a region experiencing unprecedented growth.
PropertyShares’ offering to the developer was equally appealing. “We were able to take funding from the initial land purchase [site finance] through to the construction/subdivision stage [construction funding],” says Colebrook.
“The loan-to-value ratio of 70 per cent was generally higher than what banks would consider – this usually ranges from 55 to 65 per cent – and the deal was put together efficiently due to our strong understanding of both property and lending.
“In essence, we were able to provide the developer with a seamless journey from origination to maturity.”
Identifying real-estate investment opportunities for investors, and structuring and implementing tailored financial strategies for commercial property clients, are at the heart of what PropertyShares does.
“Private real-estate debt has become a staple of any portfolio, and the developing size of the private debt market makes it impossible for investors to ignore,” Colebrook explains. “Private debt helps capture additional premiums and other correlations that traditional fixed income can’t offer, making it all the more essential in a diversified portfolio that’s not strongly correlated to traditional assets.”
For small to mid-size developers, PropertyShares lends from $1 million to $30 million, with most projects generally financed within four to six weeks. “Essentially, we’re a nimble capital provider that offers certainty to borrowers seeking a fast and reliable way to finance their projects.”
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