In an ever-changing financial landscape, capital protection is at the forefront of savvy investors’ minds. While growth opportunities are important, safeguarding your investments should be a priority.  

In this article, we explore how real estate debt can play a pivotal role in protecting your portfolio while still delivering robust returns.

Why capital protection matters?

Market volatility and economic uncertainty can erode the risk weighted value of traditional investments like equities. Real estate debt, on the other hand, offers an appealing alternative, blending steady income with mortgage-backed security. As an investment, real estate debt can reduce risk and provide a cushion during market downturns, a point highlighted by The Reserve Bank of Australia. 

We’ve created robust risk assessment and management processes to keep your investments secure. It’s part of what has allowed us to achieve weighted average returns of greater than 10% p.a. across ~$1bn of investments throughout our ~10 year history.

How real estate debt works

Real estate debt involves lending funds to property developers or owners, secured against the development itself. This asset-backed approach ensures that even in adverse scenarios, your capital retains the protection of the underlying land and project value. According to CoreLogic, Australian real estate continues to demonstrate resilience, making it an attractive sector for investors prioritising security. 

Balancing risk and reward

One of the key benefits of real estate debt is its ability to offer higher yields compared to traditional fixed-income securities, all while maintaining a lower risk profile by virtue of its being secured. As noted by The Australian Financial Review, the growth of Australia’s private credit market underscores the increasing demand for these tailored financial solutions. 

Diversify for stability

Incorporating real estate debt into your portfolio is one way to achieve diversification, which can reduce overall risk exposure. Non-bank lending opportunities, in particular, provide streamlined access to this growing sector, as noted by Australian Broker News.

Secure your financial future

Real estate debt offers a balanced approach to capital protection and growth. Together, we can explore how this innovative investment can strengthen your portfolio while keeping your financial goals on track. Contact us today to learn more about how you can incorporate it into your portfolio.