Dalian Wanda Group has purchased
Gold Fields House in Sydney for $425 million.
The property, located at 1 Alfred Street Circular Quay, is currently an office block and will be turned into apartments that will feature frontline views of Sydney Harbour.
The sale continues the trend of Chinese property investment and development in Australia.
Cashed up Chinese companies and developers are seeing the potential of investment in Australia with its transparent regulations and general ease of doing business seen as highly favoured by Chinese businesses.
Neil Brookes, Knight Frank's head of capital markets Asia Pacific, says Chinese investors will only continue to increase their purchasing output in the foreseeable future.
"The key factors for Chinese investors are the policy push from the Chinese government to diversify into other countries; a softening domestic market; and the pull from higher returns achievable in overseas markets. Australia, the US and the UK are the top three markets most Chinese investors are looking at.
"We saw five times as much capital outflow from China into these three markets in 2013 alone compared to the previous year. We expect the transaction volumes from Chinese investors into these three markets this year will match or even exceed that of last year.
“There has been a tremendous surge of Chinese outward investment in overseas real estate in recent years. From 2009 to 2014, the total value of Chinese overseas investment volume has skyrocketed from $US600 million to hit an estimated US$15 billion (A$18.45 billion).
"So far the thrust of this investment has been focused in gateway cities of Australia, the US and the UK. In 2014, Australia has seen the strongest growth in inbound real estate investment from China at over 60 per cent increase year on year."Circular Quay has entered a period of redevelopment with a $1 billion redevelopment of the site of the AMP building at 50 Bridge Street recently being approved along with other properties set to get a revamp in the northern end of Circular Quay in 2015.
Investment in Australia increased by $2 billion in 2014 with $17.7 billion transacted in 2013 compared to $19.8 billion in 2014.
Colliers International managing director of capital markets and investment services John Marasco said international investment should remain steady "Pacific investors continue to believe that good investment opportunities exist in the global market but are increasingly difficult to find. This lack of stock is now leading to more investors looking to behave differently to maintain strong returns.”
Pacific investors prefer Sydney (58 per cent), followed by Brisbane (44 per cent), then Melbourne (43 per cent). Brisbane is the stand-out overtaking Melbourne and becoming a new trend in the market.
Feature image source: SMH