Australia’s Private Real Estate Credit Market Draws Rising Interest from Singapore and ASEAN Investors

SINGAPORE – As traditional property investments in Australia remain popular among ASEAN investors, a quieter but rapidly growing trend is gaining traction: private real estate credit. Leading the charge is Zagga, an Australian non-bank lender, which is seeing a surge of interest from institutional investors, family offices, and wealth managers across Singapore and Southeast Asia.

Zagga CEO Alan Greenstein says investors in this region are drawn to Australia not just for returns, but because of familiar ties through education, family, and business. “Unlike investors in Japan or South Korea, those in Singapore and nearby countries already understand Australia’s property market deeply,” he said.

Expanding Footprint in ASEAN

Currently, ASEAN investors contribute around 15% of Zagga’s funds under management (FUM). With major backers from Singapore and Japan, Greenstein is now aiming to double the ASEAN allocation within the next two years. A step in that direction includes appointing Ms Roushana Sjahsam as Senior Board Adviser for ASEAN, a newly created role aimed at accelerating Zagga’s regional push.

To further ease cross-border participation, Zagga has launched a Singapore Variable Capital Company (VCC) the Zagga Real Estate Credit Fund (ZRECF) with initial commitments of A$20 million, and a target to match its A$200 million Australian fund. The VCC structure allows investors to diversify across sub-funds and choose their preferred currency: AUD, SGD, HKD, or USD.

Why Private Credit is Gaining Ground

Private real estate credit refers to non-bank loans extended to property developers. For developers, it’s an alternative to traditional financing. For investors, it offers steady income via interest payments and an asset-backed investment that sits lower in risk compared to equity markets.

Ms Sjahsam explained that while Southeast Asian investors have historically leaned toward the US and European credit markets, Australia is now seen as a strong alternative, thanks to its robust governance, rule of law, and real estate undersupply, especially on the country’s east coast.

“There’s a massive opportunity here, underpinned by Australia’s housing crunch and strict banking regulations that limit lending,” said Greenstein.

The Australian private real estate credit market is now worth around A$90 billion, or 17% of the country’s total property credit market, meaning a vast 83% is still held by banks leaving ample room for private credit to grow.

A Safe Haven with Strong Returns

Zagga’s appeal lies not just in diversification, but in its consistent returns and conservative strategy. Since its first loan in 2017, Zagga has deployed over A$2.5 billion across more than 300 commercial real estate deals spanning residential, industrial, and mixed-use projects. The firm maintains a zero-loss track record, achieved through a disciplined lending model that caps loans at 65% of a property’s valuation, providing investors with a 35% equity buffer.

“The asset has to lose more than 35% of its value before investors see a single dollar of loss,” Greenstein said. “You simply don’t get that level of protection in equity markets.”

In terms of performance, Zagga is offering returns of around 8.5% in Singapore dollars, far outpacing conventional savings products and attracting investors seeking stable income amid global market turbulence.

Retail Access Through Bigfundr

Zagga’s reach extends beyond institutional investors. In Singapore, retail investors can access Zagga-backed opportunities through Bigfundr, a fintech platform licensed by the Monetary Authority of Singapore. With investment minimums starting at just $1,000, the platform democratizes real estate debt investments that were previously reserved for high-net-worth individuals and institutions.

Australia’s Real Estate Landscape: Opportunities and Risks

While Australia’s east coast remains highly liquid and attractive, Greenstein cautioned that not all markets are created equal. For instance, Melbourne’s high-rise sector saw a downturn due to oversupply and the impact of cooling China-Australia ties and pandemic-related slowdowns. However, he believes the return of international students and improving diplomatic relations will aid recovery.

As regional investors continue to seek secure and diversified income streams, private real estate credit in Australia is emerging as a compelling alternative. With Zagga expanding its footprint across ASEAN and making investments more accessible, this niche asset class may soon become a mainstream part of Southeast Asian portfolios.