Chinese property developer Dahua Group doubled down on Australian real estate this month when it acquired its second development site down under within 30 days.
The Shanghai-based real estate company this past week bought a residential site in suburban Melbourne for A$50 million ($37.1 million) just a few weeks after picking up a project in Sydney.
Dahua, a top 50 Chinese developer, joins a host of Chinese property companies pursuing projects in Australia as mainland investors diversify their holdings beyond their home markets. With Australia’s weakening currency and close ties to China, Melbourne and Sydney are becoming top targets.
Local Developers Make 42% Gain in Three Months
Dahua bought the 5,197 square metre site at 33-53 Camberwell Road in the Melbourne suburb of Hawthorn East from a consortium of local investors led by Trenerry Property Group director Robert DiCintio.
The local group had consolidated the site from a number of other properties at a cost said to total A$35 million ($26 million), according to local property reports. The Melbourne-based group only completed their own acquisition of the site in May of this year, before flipping the project to Dahua in an off-market deal.
Dahua already has three other Melbourne projects in the pipeline, including its Garden Street development scheduled to come online in the suburb of Yarra in 2017. Two other projects are somewhat further down the road, with King’s Leigh in Werribee expected to be completed in 2020, and Loch Haven in Cranbourne West scheduled for completion in 2023, according to the company’s website.
Aiming for Projects in Central Sydney
Dahua’s latest Melbourne acquisition follows just few weeks after the company was reported to have picked up a site in Sydney in mid-July.
The Chinese developer bought the 2.07 hectare site in the Sydney suburb of Waterloo from the city’s water authority for a reported A$80 million ($59.4 million) last month. Now Dahua says it will build 450 apartments on the site of the water company’s former workshops, with the mixed-use building expected to be completed in 2018.
Dahua boss Jin Huiming has reportedly relocated himself full-time to Australia to pursue projects there, as the company takes on more projects down under. The developer grabbed nationwide headlines in May this year when it proposed an A$3 billion ($2.22 billion) project to redevelop the Sydney Fish Market, but is said to have withdrawn that bid after a local backlash.
In addition to its Melbourne projects and the newly added site in Waterloo, Dahua already has an apartment project in Sydney’s Bondi Junction, and altogether is estimated to have a landbank of 1269 residential lots and 570 apartments in Australia.
In a survey of 70 large Chinese cities conducted last month, China’s National Bureau of Statistics found that average home prices were still falling in 33 of those communities. The soft domestic market, along with an Aussie dollar that has lost 21 percent of its value against the Chinese yuan in the last year, has helped to make Australia a leading market for Chinese real estate investors.