October 7, 2022

Mind the gap between independent valuations and a mark-to-market assessment


To date, we have not observed property sales transact meaningfully below their valuations but have noted that the time to transact and the number of interested parties to complete asset purchases is softer than 12 months ago, which we consider to be a typical precursor to valuations pulling back.

We have proactively taken the following key actions over the past 12 months to reduce valuation risk in our portfolios:

This week, two new loans settled – an income producing commercial real estate portfolio in New Zealand and an acquisition of cattle breeding farmland in New South Wales. These investments have a weighted LVR of 62% and are forecast to generate an investor IRR of 11.6% (net of fees and costs). Due diligence is progressing on $820m of new loans that are forecast to close in Q4 2022 with a weighted average LVR of 63% and estimated average investor returns of 12.1% (net fees and costs).

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