By Joe Christie, Executive Director (Investor Relations & Distribution), Capital Property Funds
In an environment of economic uncertainty, property debt funds are emerging as a compelling option for
investors seeking reliable income and stability.
Offering attractive interest and backed by real property, they provide a resilient alternative to more volatile assets—an attractive feature in unpredictable markets. Global financial markets remain unsettled, with concerns about US trade policy, tariffs, and recession fears. Central banks face slowing growth and rising inflation.
In response, investors are increasingly seeking lower-risk strategies that still generate meaningful returns.
Property debt funds pool investor capital to finance loans secured by real estate. This security means that if a borrower defaults, the lender has recourse to the property—offering a clear downside buffer.
While some assume non-bank lending is riskier, these funds typically support well-managed, asset-backed projects that fall outside traditional banks’ narrowing criteria. For investors, this opens the door to high-quality, risk-adjusted returns anchored by real assets.
Australia’s property market remains relatively robust. Unlike listed equities, which swing with sentiment, property debt funds are unlisted and less reactive to market noise. They deliver predictable income through borrower interest payments and are generally less volatile. As banks scale back lending, property debt funds meet demand, securing favourable terms that translate into better investor returns.
In uncertain times, the combination ofsteady income, property-backed security, and lower correlation to public markets makes property debt funds an attractive portfolio addition.
More information: capitalpropertyfunds.com.au
