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A Mismatch in Allocation

While investors continue to compete for yield in saturated markets like the US and Europe, Asia Pacific (APAC) - despite its economic scale, growth trajectory, and rising institutional demand - accounts for less than 10% of total private capital AUM, and an even smaller share of global private credit.

That imbalance, however, is starting to correct. APAC is beginning to see some real private credit growth, underpinned by a number of long-term structural trends:

• Urbanisation is reshaping cities and driving capital needs.
• Capital markets are maturing, with borrowers seeking alternatives to traditional bank financing.
• Regulatory frameworks are evolving, enabling broader institutional participation.

Together, these dynamics are unlocking one of the most overlooked private credit markets globally - particularly in real estate.

For allocators, APAC now presents a compelling opportunity to access differentiated, real asset-backed strategies - offering structurally higher yields and less competition in a market that is beginning to open up.

Real Estate Credit in Focus

Within the broader private credit opportunity, real estate credit - particularly senior secured lending - is fast emerging as one of the most attractive collateral-backed opportunities.

At CapitaLand Investment (CLI), we see real estate private credit as the next frontier for sophisticated lenders. As banks pull back and refinancing gaps widen, the opportunity to provide senior secured loans against high-quality assets is growing.

These transactions offer compelling yields underpinned by real asset security - but they reward only those with the local structuring expertise to navigate complex markets and the experience to unlock value.

A Platform built for APAC Private Credit

At CLI, we’ve built a regional platform designed to capture the next wave of growth in APAC private credit. With deep roots in the region’s real asset markets, our approach combines local sourcing, structuring, and regulatory expertise to unlock attractive, risk-adjusted returns. Longstanding relationships with sponsors, developers, and borrowers enable us to originate bilateral, off-market transactions, while our in-house investment and asset management teams support execution from end to end.

Our acquisition of Wingate has expanded our credit capabilities in Australia, and our AMC license in South Korea allows for direct deal sourcing and execution. With our senior leadership team averaging over 20 years of experience across origination, underwriting, and loan servicing, our platform delivers tailored capital solutions aligned with investor mandates and borrower needs.

Momentum is Building

Institutional interest in APAC private credit is accelerating - and with it, deal flow across key markets. According to our in-house tracker, private credit activity in the region rose 17% year-on-year in H1 2024, clear evidence of rising demand and deeper institutional engagement.

In response to this momentum, CLI’s Private Credit now operates as a standalone business line - a reflection of both our strategic focus and the growing appetite from investors.

This is the first in a monthly series where I’ll be sharing perspectives from the front lines of APAC’s evolving credit landscape - the trends we’re watching, the conversations we’re having with borrowers and investors, and where we see real opportunities taking shape.

Next up: how lenders are navigating the ground realities in Australia, South Korea, and beyond.