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Asia Pacific’s (APAC) credit market is vast - valued at an estimated US$63 trillion, on par with the US and Europe combined. Yet unlike its Western peers, over 80% of credit here still flows through banks. For investors, this imbalance represents one of the most overlooked opportunities in global private credit.

As traditional lenders pull back and borrowers seek tailored financing, private credit is cementing its place in APAC's financial system. Among its segments, real estate private credit stands out—offering stable income, downside protection, and differentiated access to some of the world’s most dynamic economies.

The Macro Backdrop: Easing, But Still Elevated 

Since 2022, central banks across the region - outside of China and Japan - have tightened aggressively. While some are now easing as inflation cools, policy rates across most of APAC remain well above pre-pandemic levels. Financing conditions are still selective, and yields remain compelling for private credit investors.

For allocators, this reinforces the appeal of private credit — offering attractive income, downside protection, and differentiated exposure to markets with strong legal and regulatory frameworks. Within APAC, Australia, South Korea, and Singapore stand out as developed markets where institutional capital is already gaining traction.

Australia: Real Estate at the Forefront

Australia is fast becoming the region’s anchor private credit market, particularly in real estate. Valued at A$85 billion in 2024 and set to nearly double by 2028, the market is benefiting from regulatory curbs on banks’ real estate exposure.

For private lenders, this means opportunity. CapitaLand Investment (CLI) recently financed a senior secured construction loan at up to 65% loan-to-cost. The developer later refinanced with a bank at lower leverage, while investors earned a gross IRR in the mid-teens. This transaction highlights how our integrated platform - covering origination, risk management, and loan servicing, creates value at every stage.

South Korea: A Market in Transition

In South Korea, tighter banking rules on real estate project finance and new mandates from state-linked allocators are opening the door to foreign capital.

While growth is subdued, selective lending and asset repositioning are creating opportunities in office and logistics, especially cold storage. Here, our AMC (Asset Management Company) licence enables us to source and manage deals directly in South Korea—a critical advantage as stricter bank lending rules create more room for non-bank capital.

Singapore: Opportunistic and Event-Driven

Singapore’s private credit market remains smaller, dominated by domestic banks. But where opportunities do arise, they tend to be episodic situational specific: recapitalisations, M&A financings and shareholder restructurings.

In these complex situations, local expertise is critical. CLI’s on-the-ground teams enable us to assess and underwrite transactions across the capital structure that banks are less inclined to support—creating value for both sponsors and investors.

India: Partnerships Pave the Way

India’s private credit market is nascent, with direct lending constrained by licensing rules. But the potential is undeniable. Evolving enforcement regime, rising institutional demand, and deep local knowledge are paving the way for partnership-driven opportunities.

For investors willing to navigate the complexity, India offers long-term growth potential and partnerships with experienced managers are the key to unlocking it.

Final Thoughts

APAC’s private credit market is not one-size-fits-all. Its diverse legal and regulatory frameworks demand tailored, locally attuned solutions.

At CLI, we believe success in this market isn’t about scale alone—it’s about being on the ground, building networks, and navigating nuances with agility. Real asset–backed private credit is not just a niche; it is the next frontier for institutional investors in APAC - and we are building to lead.