Goldman Sachs Refinances A$500 Million Commercial Real Estate Fund in Australia

Goldman Sachs Group Inc. has successfully refinanced Pallas Capital's A$500 million (approximately $330 million) private credit fund, known as Pallas Funding Trust No. 2, aimed at supporting mid-market companies struggling to secure financing from traditional lenders. This refinancing marks a significant move in the Australian property credit market.

Pallas Capital's chief investment officer, Dan Gallen, previously noted that the original fund structure included a substantial investment of A$450 million from Ares Management Corp. and an additional A$50 million from Pallas itself. This partnership highlights the growing interest in private credit solutions, especially as local banks have hesitated to lend in this space due to potential regulatory tightening.

The Pallas fund specializes in providing pre-development and residual stock loans, secured against unsold units, alongside investment property loans. Most transactions typically range from A$2 million to A$20 million, catering to the unique needs of mid-market firms.

With an increasing number of firms like Rest, PGIM Inc., and Dexus raising capital for property credit this year, the landscape in Australia’s private credit market is evolving, offering more opportunities for companies to access vital funding.