Investors

Merricks Capital provides innovative investment solutions that deliver consistent performance for its investors while operating with financial discipline and prudent risk.
Our investment strategies include private credit across commercial real estate, agriculture and infrastructure and specialised industrial.

May 14, 2021

Investors Market Review

“The ‘Inflation’ Tide may not raise all ‘Cost’ Boats”

Material inflation and tight labor markets suggest construction costs should be rising.
However, the anecdotal evidence of our borrowers is that construction tenders in the apartment sector are coming in below expectations
It appears the 70%+ decline in new apartment developments is leading builders and sub-contractors to compress margins to win business.
This is good news for developers and underpins the significant discount to replacement cost reflected in our loan attachments points (LVRs).
It does introduce some construction risk as builders have no margin and could face rising material costs during the life of a build contract.