Australia’s biggest developer of apartments is considering an offer to sell half of its business to an unnamed Chinese real estate company for A$3 billion (US$2.8 billion) according to a recent media report.
Sydney-based Meriton Group received the offer during a recent trip to China, the company’s billionaire founder, Harry Triguboff told the Australian Financial Review today.
“I am thinking I could sell part of (Meriton),” Triguboff said. “It is very early stages, but I could be prepared to sell the development part of the business.” Meriton is Australia’s largest developer of apartments, and Australian housing has become increasingly popular with wealthy Chinese home-buyers.
Asked which developer had made the offer, Triguboff said only that the Chinese firm builds 200,000 homes in China each year. Even China’s 10th largest developer in 2013, Guangzhou R&F Properties built 2.88 million square metres in housing last year, which would translate into 288,000 100 square metre homes.
Meriton is in talks only regarding the sale of its apartment development division, and the firm also has an apartment rental business which is estimated to be worth A$3.5 billion.
Chinese Buyers Taking Up 18 Percent of Sydney Market
A report published by Credit Suisse early last month predicts that Chinese buyers will purchase US$39.54 billion worth of Australian residential property over the next seven years. The investment bank estimates that 12 per cent of all new housing purchases, and up to 18 per cent in Sydney and 14 per cent in Melbourne are currently made by Chinese buyers.
Shanghai’s Greenland Group announced late in March that it had acquired two more parcels of land in Sydney, Australia, after buying a site each in Melbourne and Sydney last year, and in February, Chinese developer Country Garden paid US$65 million for a Sydney site.
China was the top foreign investor in Australia’s real estate in the last financial year, according to the Foreign Investment Review Board, with Chinese investors buying A$5.9 billion worth of real estate, 11.4 percent of total foreign investment in the sector.