How we invest

Each loan arranged by Zagga is secured by a first ranking real property mortgage against one or more quality property assets with a recent valuation. These loans are further supported by:

1. detailed due diligence in relation to the experience, financial position and reputation of the borrower and sponsor/guarantors;
2. a clear and achievable ‘exit strategy’, typically including at least two or three alternative exits;
3. experienced third-party legal firms engaged to document all loans to ensure each loan is correctly secured; and
4. active management of all loans by the Zagga team throughout the term, including asset recovery if required.

Zagga arranges loans secured against the following real property asset types:

1. Australian capital cities, with a focus on metropolitan Sydney and Melbourne but with some exposure in Adelaide, Brisbane and Hobart, as well as in regional areas within 100 kilometres of capital cities, mostly across New South Wales, Victoria and Queensland. No exposure in Northern Territory or Western Australia;
2. secured property values generally in the A$2 million to A$30 million range, where buyer and refinance liquidity is relatively deep; and
3. non-specialised property assets including land with residential use, completed apartments, generic commercial property and construction loans.

More specifically, and as part of the credit assessment process, Zagga considers critical underwriting factors on a deal-by-deal basis, including:

1. location and site amenity;
2. land acquisition value and terms, relative to an independent professional valuation;
3. conditions precedent and ongoing covenants and conditions subsequent;
4. the security structure;
5. the loan-to-value ratio or the loan-to-cost ratio; and
6. borrower income, other net assets and repayment history.

In the case of a loan secured by a development site, including a construction loan, Zagga will also look at addition criteria including additional funding sources, sponsor track record, the contingency allowance and presales, among other factors.