Asset Lend Commercial Loans in Melbourne

Melbourne's CBD repositioning cycle drives asset lend demand

Melbourne CBD office has experienced one of the deepest post-COVID resets in Australia, with secondary B-grade stock trading at 30–45% discounts to pre-2020 valuations. This has created sustained transitional deal flow: distressed sales, vendor-finance back-stops, repositioning plays from office to alternative use, short-settlement opportunities. Asset lend is the financing tool of choice for these transactions — bank policy excludes them, but the underlying property security supports a debt-only underwrite.

Resale liquidity in Melbourne supports the structure

Asset lend lenders rely on being able to recover their loan through sale if borrower default occurs. Melbourne's commercial market provides reasonable resale depth: sub-$5M industrial typically clears within 90–150 days, suburban office within 120–240 days, and even harder-to-place CBD secondary stock clears within 6–12 months at appropriately discounted pricing. This liquidity profile allows non-bank lenders to fund 55–65% LVR facilities on assets banks won't touch.

Pricing reflects the policy gap

Asset lend rates in Melbourne currently sit at 8.50–11.50% for senior facilities depending on asset, LVR and term. This is the cost of accessing deals that would not otherwise settle. Most asset lend facilities are structured as 12–36 month terms with interest-only payments and a defined exit (tenant securing, refinance to bank, sale, project completion). Smart borrowers price the asset-lend cost into their acquisition model and ensure the equity uplift justifies it.

$4.5M vacant CBD office floor, Collins Street

Investor acquiring a vacant 720sqm whole-floor at ~38% below 2019 peak valuation, 4-week settlement on a distressed vendor. Bank funding impossible (vacant, timeframe). Asset lend at 55% LVR ($2.48M), 9.85% IO, 24-month term. Borrower secured a 7-year tenant 11 months post-settlement and refinanced to bank at 6.95%. Total asset-lend cost ~$310k against an equity uplift on stabilisation of ~$1.8M.

$2.8M development site, Brunswick

Developer purchasing a DA-approved 14-unit residential site, capital tied up in two concurrent projects. Asset lend bridge at 60% LVR ($1.68M), 9.65% IO, 15-month term with capitalised interest. Refinanced into senior construction debt at month 12.

$1.9M strata office, Southbank

Borrower with recent bankruptcy discharge purchasing for own occupation. Outside bank policy on credit; no acceptable serviceability on lease doc as owner-occupier. Asset lend at 55% LVR ($1.05M), 10.50%, 24-month term. Refinanced to low doc lender at month 23 once business financials were re-established.