June 21, 2024

Retail Therapy for Private Credit


With its income resilience and market liquidity, the retail property market presents a strong contender for additional capital allocation in 2024. Despite the uncertainties in consumer spending and cash rates, retail assets have demonstrated through-the-cycle strength, which is fundamental to senior asset lending. With our anticipation that transaction volumes will remain elevated compared to ten-year averages in the sector, we look at the outlook for private credit opportunities.

Merricks Capital holds approximately $120 million of senior secured loans backed by retail assets. The sector represents 6% of the Merricks Capital Partners Fund. We currently have two assets nearing repayment, one 30km from Adelaide, which is a large-format retail site and expected to transact by September at a price point higher than 2023 valuations and one loan in New Zealand secured against a diversified retail portfolio which has multiple offers to refinance our position during Q3 2024. As retail loans repay, we will look to redeploy up to $150m into the sector, with $220m in the pipeline across WA, QLD and NSW.

  Source: RLB Construction Tender Index

Source: Colliers

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