H
ello and welcome to the latest edition of Private Capital Pulse, brought to you by DLA Piper Australia. I'm Jon Ireland, a corporate funds partner based in Sydney, and today I'm joined by Stephanie Lambert, a real estate partner at DLA Piper and sector lead for Australia.

    We're shifting our focus back to asset-level discussions, having previously explored funds and fund structuring, capital raising, and more. Steph, let's start with your views on the current state of the market and key sub-sectors within real estate.

    There's been significant interest from inbound investors in various Australian asset classes. I believe this will be a larger year for transactions overall. Industrial assets are particularly popular, driven by e-commerce growth and the potential to repurpose warehouses into data centers. Data centers have seen substantial interest, with established industrial operators partnering with data center operators to roll out new sites.

    We're also seeing interest in the living sector, specifically sub-regional shopping centers offering strong returns on investment and development potential. Private credit remains a key area of focus, with ASIC's recent paper exploring market diversions between public and private markets. I'll hand over to Jon for an update on this topic.

    The private credit space is a critical connection point between the private capital universe and real estate. Industry discussions have highlighted the need for clarity around industry makeup and commercial environments to understand risk profiles. Private credit encompasses a broad spectrum of business models and risk profiles, from consumer lending to institutionalized commercial real estate lending and global M&A markets.

    This complexity makes it challenging to develop a one-size-fits-all approach. It will be essential to understand the various segmentation aspects as we move forward. Looking ahead, the upcoming federal election in Australia may impact the real estate market, particularly in the living sector. The existing government's Build to Rent tax concessions and the Housing Australia Future Fund are key areas of focus.

    The opposition has expressed concerns about these initiatives, potentially leading to changes or removals if they come into power. This is a watch-this-space situation, and we'll be keeping a close eye on developments.