Thinktank eyes further growth
Performance in Australia’s commercial-property sector has been mixed though the Sydney and Melbourne markets have been relatively robust. Jonathan Street, chief executive at Thinktank Commercial Property Finance (Thinktank) in Sydney, says the sector’s growth potential remains undiminished.
Thinktank hit the A$1 billion (US$672.9 million) mark in loans under management in April 2019. How do you view the opportunities for further growth?
Our securitisation programme has continued to evolve and mature with programmatic issuance over recent years. In the last year, we’ve introduced further domestic and international warehouse relationships and capacity in support of our extending growth profile, in anticipation of expanded future securitisation activity.
How do you assess the state of the commercial-property sector in Australia at present?
Office space and industrial property have led the way in Sydney and Melbourne with low vacancy rates and strong fundamentals. Retail has been soft in parts, though not as pressured as for larger-ticket property types as local retail has proved much more adaptable and in demand. Industrial and retail in other capital and regional cities bears close attention as vacancy remains elevated and demand is soft-to-weak.
What are the challenges and advantages in marketing commercial real estate to investors who are more used to seeing residential mortgage product from Australia?
We certainly feel there are genuine advantages for investors by way of the asset and name diversification on offer. Meanwhile, initial familiarisation with, and due diligence on, small-ticket commercial mortgage-backed securities is something with which our team can efficiently provide assistance.
The federal government announced the Australian Business Securitisation Fund in November 2018. Is this relevant to Thinktank either as a source of funding, a potential catalyst to greater investment in the sector or even a competitive threat?
The way in which the Australian Office of Financial Management is approaching the initiative is encouraging. The key motivating notion of expanding the market across assets, issuers and investors to facilitate greater competitiveness and depth in the provision of finance to Australian business should hopefully prove beneficial to all participants.
We see this as a potential source of funding and not as a competitive threat. Potentially there is also a role for us to play as a repeat nonbank issuer, by drawing from our established platform and track record alongside the efforts of government and related engagement with investors.
Is Thinktank exploring labelling loans for sustainability purposes?
nonbank Yearbook 2021
KangaNews's sixth annual guide to the business and funding trends in Australia's nonbank financial-institution sector.