Labassa Capital Credit Fund Update May 2024

The Fund returned 0.85% in May, equating to 12.42% annualised performance since inception, net of fees. As of 31 May 2024, the LVR of the Fund was 56.11%. Siteworks were completed for one of the Fund‘s underlying investments, a 40-lot residential subdivision in Box Hill, NSW. 60% of the project’s lots have been presold to the market with settlements expected to commence from mid June 2024. The Fund maintained its allocation to the six investments from the month prior, distributed across New South Wales and Queensland. 

Australian real estate values continue to rise for the sixteenth consecutive month, according to CoreLogic. The Australian median dwelling value rose a further 0.8% in May, reaching $785,556. The cash rate remained at 4.35% as the Consumer Price Index (CPI) sits at 3.6%, above the target level of 2-3%. The unemployment rate gradually increased to 4.1% in April, 0.4 pts higher than April 2023. Wages were 4.1% higher than a year prior in ABS’ latest report, however consumer pessimism remains high. Westpac’s consumer sentiment index dipped to 82.2 in May, largely due to the higher than expected inflation reported in April and the Federal Budget. Labassa Capital expects Australian real estate prices to continue on their upward trajectory in the second half of 2024, largely due to continuously rising demand and stagnant supply.

Labassa Capital's project pipeline was $674 million in May, encompassing 23 projects with an average value of approximately $29.3 million each. These projects were located in New South Wales, Queensland, South Australia and Victoria.

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