Rest boosts investment in Australian real estate debt fund

Rest has increased its investment in Metrics Credit Partners’ Real Estate Debt Fund (REDF) with an aim to further diversify its private market exposure.

REDF offers direct exposure to Australia’s commercial real estate (CRE) loan market by investing in a portfolio of Australian CRE loans. These span industrial, retail, office, and residential development and specialised assets like healthcare and hotels.

According to Rest, the investment strengthens its position in Australian private credit and provides the fund with the ability to capitalise on attractive conditions in the domestic non-bank lending market.

“REDF offers an opportunity to grow Rest members’ savings through investment in a diversified portfolio of high-quality commercial real estate loans across residential and industrial projects,” said Andrew Lill, Rest’s chief investment officer.

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“With its attractive risk-adjusted return profile, we expect REDF will deliver strong results to Rest members.”

He observed a more favourable environment for non-bank lenders to participate in commercial real estate lending, given the combination of higher interest rates and traditional banks scaling back lending.   

“We believe the characteristics of the Australian commercial real estate market also offer unique advantages compared to overseas markets that further build on REDF’s compelling investment proposition,” said Lill.

This, in part, is attributed to the line fee and margin for assets charged by Australian lenders before construction, which leads to potentially higher levels of return than similar overseas loans.

Andrew Lockhart, managing partner at Metrics Credit Partners, said the additional investment underscores the value of Metrics’ strategic and competitive real estate private credit solutions.

“Rest’s expanded investment demonstrates the value of the REDF and confidence in the fund’s strategic approach,” he said.

“We look forward to continuing our momentum together, helping the fund and its members to leverage the distinctive opportunities and continued growth potential within the Australian real estate market.”

The additional investment follows a number of significant investments made by Rest in the last year. These include an initial investment of $150 million into an international listed equities mandate with global investment manager Ninety One announced in February and signing on as a cornerstone investor in Fidelity International’s Fidelity Real Estate Logistics Climate Impact Fund in April.