(Bloomberg) -- Warburg Pincus has committed A$490 million ($327 million) to real estate credit investments in Australia through a vehicle set up by MA Financial Group.
Warburg Pincus’s Asia Real Estate Fund will become the investment partner with what may be as much as half of MA Financial’s Real Estate Credit Vehicle, which has been targeting a total raise of as much as A$1 billion.
The vehicle aims to take advantage of what it sees as a “persistent funding gap within Australia’s acutely undersupplied residential housing market,” Warburg Pincus said in a statement Thursday.
“Over the next five years, Australia’s cumulative housing shortage is projected to reach approximately 254,000 dwellings, alongside an anticipated 30% increase in annual population growth,” Takashi Murata, co-head of Asia Real Estate and head of Japan at Warburg Pincus, said in the statement. “With traditional financiers tightening credit, there is an estimated $37 billion funding gap that needs to be addressed.”
MA Financial, the Australian affiliate of investment bank Moelis & Co, had already announced the two companies would work together on the vehicle, but the investment underlines what Murata called Warburg Pincus’ “strong conviction in the secular tailwinds of Australia’s residential market.”
The commitment adds to a growing pile of capital assembled to play upon the theme after Australian pension fund Rest, global asset manager PGIM Inc., and Australian property developer Dexus all raised property credit funds in the country.
Warburg Pincus has $8 billion invested in 60 real estate ventures across Asia, according to its website. In 2021, the firm closed its inaugural Asia Real Estate Fund at $2.8 billion.
(Updates to add Warburg Pincus’ presence in Asia. Corrects to remove reference to fund throughout story)
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