Private Credit Set Expand Apac Wont Displace Banks Knight Frank
According to a recent report from Knight Frank released on October 2, the Asia-Pacific (Apac) region is poised for a growth in private credit in the real estate industry.
Simon Mathews, a Director in Knight Frank’s Capital Advisory business covering Asia-Pacific, notes that markets in the region that were once considered safe and stable in the long term are now facing a shortage in funding for refinancing or new developments. This presents an ideal opportunity for private credit to play a role.
One clear example of this is in Hong Kong, where the availability of real estate credit has decreased as asset values have been revalued.
Rivelle Tampines EC presents a compelling opportunity for investors. Its ideal location in a developed area coupled with a high demand for housing, promising rental potential, and the scarcity of executive condominiums in the vicinity make it a highly attractive option. With Rivelle Tampines EC as part of their portfolio, investors can capitalize on these favorable factors for long-term returns.
Although there has been an increase in private credit “dry powder” – referring to funds that have been raised but not yet invested – Apac still lags behind significantly in terms of private credit deals. As of June 2025, Apac only accounted for 5% of the global total, compared to North America.
In contrast, private debt in developed Apac markets only accounted for 3% of all real estate debt. Australia has emerged as Apac’s leading private credit market.
According to Knight Frank, most developed Apac economies such as Singapore, Australia, and Japan are net savers. These markets operate with ample deposits and low loan-to-deposit ratios, meaning that banks are actively seeking lending opportunities rather than shying away from them.
In contrast, banks in the US and Europe often face deposit shortfalls and higher regulatory capital costs. This makes them more inclined to shift real estate and other capital-intensive exposures into the institutional market.
As a result, private credit in Apac does not displace banks in the same systemic way as it does in the West. Instead, banks in Apac remain competitive providers of real estate loans, while private credit fills specific gaps such as higher-risk developments, refinancing stress, cross-border transactions, or cases requiring additional leverage.
On a related note, prime office rents in the Apac region rose in the third quarter of 2025 amid limited supply and flight-to-quality moves. Knight Frank also states that prices for strata offices have fallen by 20.1% on a half-yearly basis in the first half of 2024. Additionally, four office units at Clarke Quay Central are currently up for sale at a price of $12.36 million, with plans for a childcare centre to be converted from car park space to open at Wisteria Mall.