Asia-Pacific private credit on a growth trajectory
Asia-Pacific real estate private credit raised $11.2 billion between 2020 and 2024, marking a 40% increase that signals the region’s growing prominence in alternative lending. Over the next three years, Knight Frank projects $90 to $110 billion in private credit growth across Australia, Hong Kong SAR, India, and South Korea. Australia is expected to drive almost 50% of this expansion, with India contributing 20-25%, based on anticipated real estate debt growth and private credit’s expanding market share through 2028.
Despite this under-representation, the region shows clear momentum. Average fund sizes in Asia-Pacific have consistently exceeded $100 million since 2022, reflecting stronger capital commitments and rising real estate project funding requirements.
Australia leads regional activity, capturing 40% of the $11.2 billion raised between 2020 and 2024. Private credit now accounts for an estimated $50 billion or 16% of total commercial real estate lending in the country, as conservative bank policies push more borrowers toward specialist private credit funds. South Korea accounts for 11% of the regional total, while Japan represents 5%, with the remaining 8% spread across other markets.
Simon Mathews, director, capital advisory, global capital markets, Knight Frank, says, “Private credit is becoming an increasingly prevalent financing option for developers and investors across Asia-Pacific, offering speed, flexibility, and solutions, in place of or complementing traditional lending sources.”
Family office interest accelerates growth
The report highlights increasing participation from ultra-high-net-worth individuals and family offices, with global family office assets estimated at $3.1 trillion. Knight Frank’s inaugural Family Office survey found 37% of respondents intend to increase indirect real estate exposure over the next 18 months, while BlackRock’s 2025 Family Office survey shows nearly one-third want to increase private credit allocations — the highest of any asset class.
Private credit providers target returns of 3 to 6.5% above benchmark rates in core strategies, with higher-risk approaches potentially delivering double-digit returns. The higher interest rate environment has strengthened the investment case for private credit as an asset class.
