Ready to deploy: Monark raises upsized $50m to fund quality resi projects

What Monark has raised $50m for series five of its high-yielding debt fund

Why The capital will be deployed in quality apartment, townhouse and land subdivision projects

What next Monark anticipates generating an internal rate of return of 15% for investors

Liberman family-backed private lender Monark Property Partners has raised an upsized $50m for its high-yielding debt fund and lined up a series of quality development projects in which to deploy the funds, Green Street News can reveal.

An internal rate of return of 15% is anticipated for investors who have committed to series five of the debt fund, which will back 16-20 apartment, townhouse and subdivision projects.

Monark, whose investor base is primarily family offices and high-net worth types, had initially targeted a $40m raise, but upsized it to $50m due to strong demand. The lender could have raised more than $50m but was conscious of having the pipeline of quality projects to deploy into, rather than just raising more money because it could.

“The $50m [number] is not really the story,” Monark co-founder and chief investment officer, Adam Slade-Jacobson, told Green Street News. “The important thing is what we do with it. We have investors who have trusted us with their capital, and now our role is to find quality developers and quality projects where we can create remarkable outcomes for both sides.”

“Good developers still need reliable capital and increasingly they value a strategic capital partner who understands development and can provide certainty throughout the project” – Adam Slade-Jacobson

Amid the fallout from the $3.6bn collapse of NSW developer and builder Bathla, which has caught out around 50 mostly private lenders (Monark has zero exposure to Bathla), Slade-Jacobson said investors in private credit were focused on the fundamentals including the quality of the sponsor and its equity contribution, construction risk, and “ultimately, how do we get our capital back?”

“They recognise Melbourne has had a challenging development environment, but they also see the opportunity that it creates for private credit,” he said. “Good developers still need reliable capital and increasingly they value a strategic capital partner who understands development and can provide certainty throughout the project.”

For Monark, when choosing projects to fund, Slade-Jacobson said the lender focused on a number of key criteria: “We need conviction in the underlying property fundamentals, confidence in the developer’s ability to execute, and genuine alignment between our capital and theirs.”

Location is also a key criteria with a preference to fund developments in middle-ring suburbs. Another is project size: Monark focuses on smaller, boutique projects given the ongoing challenges in securing pre-sales

Getting off the ground

Projects that have already secured funding from Monark following the latest debt-raising include two inner Melbourne projects: Rae Street Three Zero One, a 26-unit project in Fitzroy North by JMSN; and Catani, an 18-residence development by Lowe Living in St Kilda West. There is also Loom, a residential subdivision project in Warragul in regional Victoria by TW Projects.

Sam Jamieson, founder and managing director of JMSN, said the partnership with Monark on its Fitzroy North project reflected the importance of alignment between developer and capital partner.

“Monark understands what we are seeking to achieve with rs301 and brings a considered, commercially grounded approach to helping us deliver it,” he said.

Monark is owned by Jagen, the family office of the Bori Liberman family and co-founders Michael Kark (also CEO) and Slade-Jacobson. Jagen is led by Justin Liberman, who is also an executive director at Monark.

Media Coverage
This story was originally written by Larry Schlesinger and published by Green Street News: Australia – see the article here