Opinion: ClarkeKann - Chinese Investment in Australian Property

Those of us who have been involved in property development and investment in Australia in the last few years have witnessed a surge of interest from Chinese investors and corporations.

In 2013, Australia was ranked second behind the USA as a destination for Chinese investment. On the “street level”, Chinese developers, whether in their own right or in partnering arrangements with local developers or experts, are transforming the landscape.

Greenland’s forthcoming projects, Greenland Centre, opposite Sydney Town Hall, Brisbane Casino and Wanda’s proposed $1 billion Jewel in Surfers Paradise, are high profile projects which have made headlines. At ClarkeKann, we have a long history of acting for foreign businesses. Our clients have included Formosa Plastics, Bank of China, Nara Resorts, China Steel, Daiyko, Hankook and Daiwa House.

We have proven capacity in assisting Asian (including Chinese and Taiwanese) property development and investment companies, with several lawyers and staff who are fluent in Mandarin and Chinese dialects. Also, we will soon offer the ability for developers to sign contracts on-line enabling property developers to tap into international buyer markets and sell their stock instantaneously anywhere in the world.

To give a clearer picture of who are the leading Chinese developers currently operating in Australia and who will lead the next wave, Property Partner Bernard Tan, caught up with Aaron Hatch, National Director of Project Marketing at JLL.

Which major Chinese developments are active in Australia at the moment?
Presently, they would be Country Garden, Greenland, Far East Consortium, Starryland and more recently Wanda Group and Roxy Pacific.
Why are they investing in Australia?
Several reasons, but the main drivers are:• the low Australian dollar and relatively low prices for real estate compared with their local markets. This is particularly the case for residential markets; • the property cooling measures introduced in markets such as Hong Kong and Singapore which include higher stamp duty costs;• the need to connect with established local family and friend networks, with a relatively large concentration of Hong Kong and mainland Chinese populations in Sydney and Melbourne;• Australia’s education system, with approximately 35% of university enrolments being from overseas students. Student enrolments in 2014 are at an all time high with the highest concentration in Victoria which has overtaken NSW. Temporary visa holders and student visa holders are able to buy new residential property in Australia; and • the introduction of the Significant Investor Visa Scheme.
Can you provide a brief description on their projects?
They are primarily interested in residential projects or purchasing CBD office assets with residential upside. Some examples are shown in the table to the right.
Which developers do you see investing into Australia in the next 12-24 months?
Roxy Pacific have already purchased an office building in Sydney. Poly Real Estate and China Merchant are two of a number of companies that are looking to enter the Australian residential market.

Original article by ClarkeKann can be published in CK Momentum Magazine at pages 6-7.