Eight current Chinese investment themes have been identified through discussions with our executive network in the Aus-China investment space, and through our research of 130+ Chinese and Australian media reports over the past month.
The themes are:
1. Chinese (& Asian) institutional and corporate investment into Australia is continuing due to their long-term investment horizons, the strength of the Aus-China-Asia relationship, the ongoing strength of the Australian economy, and the attractiveness of ‘destination Australia.’ SOEs, in particular, are being pushed by the Chinese government to invest abroad as a means of driving greater competitiveness and transparency and are poised to take a larger role in the Australian property market.
2. However, there is wariness on whether a fractured Senate and high-profile independent senators championing opposing agendas will lead to weakened political governance and disunity in economic direction. As recent comments from Gui Guojie, the chairman of property developer Shanghai CRED, which is backing the Daking bid for S Kidman demonstrate, so far this wariness has been tempered with hope that there won’t be any sea change in the underlying Australian regulatory process.
3. The number of new Significant Investor Visa (SIV) investors has reached 36 ‘applications’ in the latest monthly data available (Month of May). Assuming 80%+ approval rates, this suggests 30 approvals per month, which is moving towards our forecast of 50-60 per month once last year’s surge in applications (before the change in the SIV investment regime) has been factored in.
4. Chinese high-net-worth and middle class property investment into Australia is becoming cautious in the short term, due to the recent reduction in bank lending to foreign investors, and surcharges on stamp duty & land tax for foreign investors in NSW, VIC and QLD. There are continuing rumours that some Chinese investors, particularly in the residential space, are backing out of settlements, or looking to immediately resell newly purchased properties, but the evidence that this is actually happening is spotty.
5. This reduction in bank lending is now opening opportunities for non-bank lenders, as long as they understand the risks. Chinese lenders see a role as they believe they can better mitigate the risk (where the borrower is Chinese) or see it as an alternative way to enter the Australian property sector at this point of the development cycle.
Our non-bank financing event in September will expand on this. For more information, click here
6. ‘Chinese developers’ in Australia are becoming ‘Australian developers’ in that their internal and outsourced teams across the entire development chain are predominantly Australian. Essentially, the capital is Chinese but nearly everything else is Australian. There is value in being Australian.
7. Chinese insurers and Chinese fund managers represent a new pool of capital to be deployed into global assets but as portfolio and yield-based investments rather than as development or corporate plays.
8. There is still a 2-way knowledge gap between the Australian and Chinese ways of deal-making & negotiation, and the influence of external stakeholders in Australia. The exit of bank financing is an example of unexpected disruption in the property sector. Click here for our workshop on the art of Chinese deal-making and negotiation.
Themes covering Aus-China venture capital, innovation & technology, agri-business & diagou sectors will be addressed in later newsletters.
NEWS HEADLINES FROM CHINA, AUSTRALIA AND ASIA MEDIA (WE WILL BE SUMMARISING THESE ARTICLES IN NEXT WEEK’S NEWSLETTER)
PROPERTY
Singaporeans snap up Yarraville site for $20m 2
ASIC exposes misleading Chinese home loan advertisements 3
Chinese developer Chiwayland to develop Penrith site 5
Wanda Ridong’s Gold Coast Jewel sales slow 6
Hanson may spook Asian investors 7
Path clear for sale of The Ribbon 9
Rail stampede as developers lobby Baird 10
Starwood brings $80m Four Points to Parramatta 17
NAB joins clamp on lending to foreigners 19
Greenland could build tower itself 20
Offshore buyers hit by restrictions 21
Sekisui swoops in $210m deal 22
Foreign-buyer stamp duty unsettles luxury market 22
Accor’s Pullman lands in Mascot 24
China’s Fosun on prowl for office assets 25
Chinese still keen on property 26
Conflict risk in unit incentives 27
Mortgage securities drought 29
Developers vie for slice of Parramatta action 31
Suite view into luxury on cliffs 32
Strong demand tipped for harbourside tower 33
New data show Chinese buyers scapegoated for New Zealand’s surging house prices 34
Chinese bet big as VIG stakes Sydney CBD claim 35
Winning design for Quay hotel 36
Zone Q swoops in $800m WA deal 37
Third-tier lenders rescue developers 37
Chinese tie up $700m Ribbon deal 39
Clean-up at former Kolotex site 40
Chinese investor buys Mercure Parramatta 41
$20m for Yarraville site 41
Malaysia developer looks to the south 42
Malaysian firm buys prime site in South Yarra 43
JV signed for city mega-project 44
Real estate shake-up looms 45
Two face hearings for tower blaze 48
Sky’s the limit in Big Apple’s apartment, hotel spurt 48
Poly launches house, land project 50
Malaysia’s Tune Hotels pays $18.5m for Melbourne site 50
VIG, United Investment buy Bathurst Street buildings for $130m 51
Chubb to sell off Sydney headquarters for $70m 52
Vancouver to tax absentee investor homes 53
Twin buy from new Chinese investor 54
Bit of the yard fetches $18m – now how much for the house? 54
Starryland’s boss needs big sites to fit his ambitions 55
With flour rising, high-flying developers need to use their loaf 57
‘Land kings’ return to reignite China’s property boom 58
Green light on Bluesky space ratio 60
The Chinese revolution in housing 60
Concern as Chinese demand falls 64
Tax on foreign buyers to stall apartment market 65
House of cards: huge commissions driving unit sales 66
Three in race for Victorian port sale 67
Walker’s towering ambition 68
Agents’ aid sought to shift stock 69
Computershare out for $88,888,888 70
Triguboff raps foreign buyer tax 71
No forced sales, says Triguboff 74
Drought underway for mortgage securities 75
Developers vie for slice of Parramatta action 76
NSW rejects all bids for White Bay 77
Developers pull back on apartments 78
Funds used to tap overseas buyers 80
Developer wins $62m battle for tower site 81
China Vanke Leads New Trends in Real Estate Investment Amidst Reclassification of China’s Tier One Cities 82
Crown wins approval for Sydney casino aimed at Asian gamblers 83
Tapping into Australia’s property sector 84
Third-tier commercial lenders rescue cash-strapped developers 86
Perth’s Westralia Plaza sold for $87 million 89
WA Insurance Commission sells Westralia Plaza for $87m 90
Strength of Chinese offer tips vendor to sell shopping centre 91
Visionary Investment Group launches new apartment and hotel brand Silkari 92
CIMIC stock slumps after Morgan Stanley questions financial accounts 93
Three out of five Melbourne developers can’t get funding: survey 96
Citi, ING put brakes on apartment loans 98
Five graphs that show why Australia’s property price growth is over 100
One in 10 apartments sold for a loss in March quarter: report 105
Rent report: Units play catch up to houses in housing-short Sydney, Domain says 109
Low-cost disruptors such as Purplebricks will shake up Australian real estate 111
(Agribusiness, VC, daigou news headlines will be published next week)
Chinese SIV, HNW and Culture 151
WeChat: The app you’ve never heard of that’s key to cracking China 151
Chinese family buys faded Collins St gem for $18.7m 153
Learning curve for Chinese 154
Asia in focus 155
China’s Ledman buys Aussie club 156
Nanshan set to join Virgin board for the long haul 157
Chinese alter course for new port – DATAROOM 159
Tsinghua bets $10bn on tech 160
Expo draws migrant Chinese 160
China’s Fox Hunt snares another Australian 161
Liberals in new push to woo Chinese Australian voters 162
Telstra nets $1.8bn from Chinese car website sale 163
Tencent clinches Clans deal 164
China spree leads hotel consolidation 165
Juwai calls in lawyers over whistleblower’s crisis email 166
Chinese Virgin stake not only Australian move 167
Chinese immigrants sing the praises of a ‘big-hearted country’ 169
China’s consumers in buying mood 170
China tycoon’s son claims bogus degree 172
HK bookseller blows gaff on his kidnappers 174
One in six Chinese unit buys in doubt 175
Operation Fox Hunt and the capture of Zhang Jianping 176
Local news outlets coming to the party for Chinese rulers 179
Nanshan Group named in two corruption cases 181
Australians see China as more powerful than US 182
Don’t believe Chinese worker scaremongering 183
Tourism more vital than teachers 185
Retail giant buys into Inter Milan 186
Rare Chinese vase used as doorstop for 36 years sells for £650,000 186
A Godlike experience … house hunting by helicopter takes off among Chinese 187
China’s Fosun eyes UK, Europe opportunities after Brexit vote 189
Turning art into business 191
Affluent half of China’s wealth by 2020 193
Asia Surges to the Top of World’s Wealthiest — Barron’s Asia 194
Chinese rich population’demand for global asset allocation to increase fast: report 195
Rising wealth offers rich pickings, says report 196
Challenge for China’s ultra rich: find the right wealth service 197
Residency at a price 199
How to become a millionaire importing from China! 200
China’s Wang Jianlin scores FIBA basketball partnership 201
China’s wealthiest on the ball as they plough money into Europe’s top teams 202
As gates open in Shanghai, Disney already adding to $5.5 bln park 205
Our billionaires in fast lane 206
Chinese executives learning to talk the business talk – in English 207
China business: Bloated but still bingeing 209
How China does its dealsThe executives taking the Ultra Wealth investment course tour Alibaba and other booming firms 210
Young, Rich Chinese Travelers Worth Watching 211
Chinese buy way to being Aussies 212
Chinese investors look to open new Australian bank 213
Why Hong Kong investors should consider Australia 214
Data shows Chinese immigrants are the largest group of new arrivals to US through the EB-5 program 216
Services to the rescue in post-boom economy 217
‘Home’ comfort, key for Chinese students abroad 220
Please register for 11 August Chinese Deal Making Workshop www.basispoint.com.au/workshopChina/