In Market Insights Episode 84, Simon Hulett, Head of Direct Investments at MaxCap Group, discusses the evolving landscape of non-bank lending, equity investments, and project finance, sharing insights critical for developers and investors navigating current market conditions. 

Now in its 18th year, MaxCap Group has grown from a pioneer in non-bank lending to a major player across the capital stack. With $8 billion under management and offices across Australia and New Zealand, MaxCap has become a go-to provider for tailored capital solutions.

Key Takeaways from the Discussion:

1. Market Trends and the 2025 Capital Stack

• Early 2025 shows heightened market activity, with multiple significant projects underway.
• MaxCap successfully topped out construction on multiple projects across Australia, including student accommodation in Perth, a downsizer development in Melbourne, and a residential project in Sydney.
• Interest rate cuts are stimulating renewed optimism and project initiations, positively influencing both credit availability and equity investment appeal.
• Competition in private credit underscores the importance of selecting strategic capital partners.

2. Why Developers Need a Clear Credit-Equity Distinction

• MaxCap emphasises the importance of clearly separating credit and equity functions to avoid conflicts of interest.
• This approach ensures transparency, builds trust with developers, and aligns with the expectations of institutional investors and partners.
• Clear governance frameworks and policies underpin this structural division.
• Simon highlights that having distinct business units for debt and equity positions MaxCap favorably within the competitive capital marketplace.

3. Choosing the Right Capital Partner

• Choosing an appropriate capital partner is critical for successful project outcomes and long-term collaborations.
• MaxCap places significant emphasis on partner credibility, including track record, financial stability, and capacity for future collaboration.
• Repeat business constitutes over 70 per cent of MaxCap’s equity partnerships.
• Successful projects depend on matching the right product with suitable locations.

4. Co-Investment, Collaboration, and Adding Value

• Equity investments involve regular, proactive engagement beyond traditional lender-borrower interactions.
• MaxCap leverages national market intelligence, construction experience, and extensive financial networks to enhance project success.
• While maintaining an active involvement, MaxCap respects developers' autonomy, ensuring partners lead project execution effectively.

5. Future Residential Development Opportunities

• Australia's ongoing housing crisis underscores the importance of exploring alternative residential solutions.
• Emerging sectors such as build-to-rent, co-living, and student accommodation are increasingly institutionalised and attractive investment propositions.
• Simon advises developers to diversify across various residential living segments to mitigate risk and capitalise on evolving market demand.
• MaxCap sees significant opportunities and capital inflows into these evolving markets.

Why This Episode Matters for Industry Professionals

• Gain insights into how interest rates impact credit and equity investment decisions.
• Learn critical factors for choosing transparent and effective capital partnerships.
• Discover growth potential in sectors like co-living, build-to-rent, and student accommodation.
• Benefit from strategic insights shared by a leading non-bank lender.

The Market Insights podcast continues to serve as a crucial resource for real estate professionals. Episode 84 with Simon Hulett from MaxCap Group provides essential guidance on navigating the evolving landscape of project finance, capital partnerships, and emerging residential sectors in 2025.