Wanda bought Gold Fields House in Sydney for $329 million in late 2014
Chinese investment into Australian real estate doubled to A$24 billion ($18.1 billion) during the 2014-2015 financial year, as mainland buyers looked for overseas assets and development opportunities.
Spending by Chinese developers, homebuyers and other investors on Australian real estate were more than three times the amount committed from the US, which was the second-ranking investor in property down under, according to a report released last week by the Australian Foreign Investment Review Board (FIRB).
Many of China’s largest homebuilders have turned to projects in Australia as the mainland market slows down, and to leverage their brand recognition among growing Chinese communities in the country’s major cities. Since the Australian government data was gathered, Chinese investment has continued to ramp up, with mainland sovereign wealth fund China Investment Corporation committing $1.79 billion of the country’s foreign reserves to a portfolio of office assets in Sydney and Melbourne last year.
Chinese Dominate Australian Inbound Investment
Sydney’s Sheraton on the Park was purchased by a Chinese insurer for $401M in late 2014
Looking at just real estate deals, Chinese investment was up from A$12.4 billion ($9.4 billion) in the 2013-2014 fiscal year, according to FIRB figures.
China’s A$18.1 billion in deals during the most recent period far outstripped the amount committed by US investors, who signed up for A$7.1 billion in Aussie property, or Singaporeans who bought A$3.8 billion in properties.
The Chinese fever for Aussie assets helped to drive an increase in approvals by the government investment review board, which rose to 37,347 approved transactions in the period, compared to just 23,428 certified deals in the 2013-2014 fiscal year.
In overall terms, China was the leading source of approved investment proposals across all sectors in Australia during the period that ended March 31st, with mainland investors committing over A$46.6 billion ($35.2 billion) to projects down under during the financial year, according to the official government figures.
Landmark Deals Just Keep Coming
Fosun purchased 73 Miller Street in Sydney for $93M during January 2015
The rise in Chinese investment that FIRB reported reflects a surge in Chinese acquisitions and deals during the waning months of 2014, when mainlanders committed $1.23 billion into Australian assets and sites as the Australian dollar slid against the US currency.
During that period, Wang Jianlin’s Dalian Wanda bought Gold Fields House in Sydney for $329 million, and Beijing-based Sunshine Insurance bought a hotel in the city for $401 million. In January 2015, Shanghai’s Fosun Property spent $93 million to buy an office building in Sydney.
That trend continued, in July last year when CIC made China’s largest commitment to date into Australian real estate by purchasing a portfolio of office properties from Morgan Stanley’s Investa Property Group for A$2.45 billion ($1.79 billion). The deal instantly made the Chinese sovereign wealth fund one of Australia’s biggest commercial landlords.
During 2016, one of China’s 10 largest developers became the latest mainland homebuilder to enter the Sydney market when China Overseas Holdings Ltd (COHL) bought a site in the city’s north side for A$80 million ($56 million).
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