An artist’s rendering of plans for the new tower on the club site.
ICD Property, a Chinese-owned developer based in Australia, has won approval along with a local builder for a A$200 million ($146 million) project to redevelop the site of a social club in Sydney into a 48-storey tower, incorporating condominiums and a hotel.
The project to convert the 120-year-old City Tattersalls Club at 194-204 Pitt Street is part of a flurry of new projects across Sydney, Melbourne and Perth by ICD, with at least some of these projects being backed by state-owned Chinese developer Sino-Ocean Land, according to an account in the Sydney Morning Herald.
The Sydney residential project, which could yield as many as 250 new apartments, is the latest in a series of major real estate investments by Chinese developers in the city, that have raised concerns about oversupply, particularly as Australia’s domestic economy continues to slow.
Club Gets A$96 Million for Its Downtown Site
Melbourne-based ICD and its partner, Sinclair Brook engineers, have agreed to pay the members of the social club A$96 million for the rights to build the tower project, with A$71 million of that ear-marked for construction, another A$20m to go for fitting out a new club within the tower, and A$5 million in cash for the club, according to an account in The Australian.
The new structure will include a 100-room hotel, three floors of retail and five floors of space for the new club, in addition to the 250 apartments. Earlier statements by leaders of the City Tattersalls Club indicated that construction on the new project would start in early 2017.
Chinese Emigre-Owned Developer Ventures into Sydney Market
Michael Mai founded ICD with the help of a family trust set up by his father, who runs a HK-listed mainland manufacturer
ICD, which is owned by emigre-Chinese entrepreneur Michael Mai, sees the new tower project as an opportunity to break into the Sydney market, after investing in developments in the Australian cities of Melbourne and Perth.
“We currently have five projects worth over $600 million under development and plan to expand our projects portfolio to over $2 billion by 2017,” Mai was quoted as saying in the Sydney Morning Herald earlier this year, when the company was still confining its deals to Melbourne.
Among ICD’s Melbourne projects is the 632-unit EQ Tower, which Sino-Ocean has also invested in. Mai has said to have been seeking the Beijing-based developer’s participation in the Sydney project as well. In addition to the Sino-Ocean relationship, ICD has also benefited from a family trust set up by Mai’s father, Mai Boliang, CEO of Hong Kong-listed mainland manufacturer, CIMC.
Even before the confirmation of the Sydney deal this week, Mai, who came to Australia for high school and university, had already moved beyond Mellbourne to take up a 75 percent stake in a A$670 million mixed-use project in Perth, in Western Australia. The six-year old company has also picked up another Melbourne project in the meantime.
ICD the Latest to Bet on Sydney
In Sydney, ICD will find many Chinese neighbors among the city’s construction projects, particularly for condo developments.
Among the biggest Chinese-backed projects in Sydney is Dalian Wanda’s Syndey One, which the developer is building at the site of Gold Fields House in Sydney, after acquiring the project last year for A$425 million.
Shimao Property, run by Australian-based Chinese tycoon Hui Wing Mao, has two projects in the city already, and another Chinese-owned local Australian developer, Vision Investment Group, also has condo projects underway in Sydney.
While all of these Chinese projects are underway in Sydney, the market for new homes appears to be cooling.
During November, the clearance rate for new homes at auction in the city fell below 60 percent for three straight weeks, according to figures from market information provider CoreLogic RP Data. Those results are down from an average of over 71 percent a year ago. Many analysts believe that parts of Sydney are already oversupplied.
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