Private Credit Set Expand Apac Wont Displace Banks Knight Frank
, YishunMar 31, 2016 10:00 PM Knight FrankForeseeing the potential for growth in private credit in the Asia-Pacific (APAC) region, property consultancy firm Knight Frank has released a report indicating the opportunities that lie ahead.
According to the report, APAC is reaching a pivotal moment where the lack of funding for refinancing or new developments in traditionally secure and core markets has created an ideal scenario for private credit. In particular, Hong Kong serves as a prime example of this trend, with a contraction of real estate credit availability as asset values are being rebased.
Simon Mathews, Director in Knight Frank’s Capital Advisory business covering Asia-Pacific, notes that although the amount of dry powder in private credit has increased, the region still lags significantly behind North America in terms of private credit deals. As of June 2025, APAC accounted for only 5% of the global total based on the target fundraise amount, compared to North America.
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In addition, the report highlights that developed APAC economies such as Singapore, Australia, and Japan operate with ample deposits and low loan-to-deposit ratios, leaving banks in a position of actively seeking lending opportunities rather than retreating from them. This is in contrast to the US and Europe, where banks often face deposit shortfalls and higher regulatory capital costs, making 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 it does in the West. Instead, banks remain competitive providers of real estate loans, while private credit fills targeted gaps such as higher-risk developments, refinancing stress, cross-border transactions, or situations requiring additional leverage.
In terms of market share, developed APAC’s private debt accounted for only 3% of all real estate debt, with Australia emerging as the leading APAC private credit market. This is significantly lower compared to North America and Europe, where private debt accounted for 12% and 10%, respectively.
Knight Frank believes that the potential for growth in private credit in APAC is significant, particularly in markets where traditional lenders are facing constraints. With the region’s strong economic fundamentals and ample liquidity, there is room for private credit to fill the gaps and support real estate development and investment.