China’s Country Garden has scooped up a residential site in a suburb of Melbourne for A$400 million ($303.6 million), where it could build more than 4,000 houses.
Should the deal by the top five mainland developer win approval from Australia’s Foreign Investment Review Board (FIRB), it would be the largest-ever Chinese land buy in the city and marks Country Garden’s first project in the state of Victoria.
The Guangzhou-based developer is buying the land from listed property company Phileo Australia, which put the parcel on the market in late April to cash in on buoyant property values in the area. The Chinese builder’s investment will be payable on a staged basis over the next four and a half years, according to a stock exchange announcement by Phileo.
Country Garden Heads to Australia’s Suburbs
Country Garden’s new 353-hectare parcel is located at Black Forest Road in Wyndham Vale, part of a suburban growth corridor about 36 kilometres southwest of downtown Melbourne.
Melbourne-based Phileo bought the rural property for A$14.5 million in 2004 and won approval for residential development last year. The site was valued at A$120 million after its rezoning.
The project marks another Australian milestone for Country Garden, which is also building a three-tower apartment project with 830 units in the Sydney suburb of North Ryde. The property giant first entered the Australia market in 2013 by buying the 17,580 square metre site from logistics giant Goodman Group for A$73 million ($65.8 million).
Country Garden last August bought its second Sydney residential site in the booming suburb of St Leonards for around A$45 million ($34.5 million), where it will develop a condo tower with over 100 units. The company’s managing director Guotao Hu told The Australian Business Review that the company would forge ahead with further development opportunities in Australia over the coming years.
Melbourne May Be Luckier Than Malaysia
Country Garden has a low profile in Australia compared to its massive investment in Malaysia, where it is building a $100 billion project in the country’s Iskandar region. The company closed the mainland sales offices for its Forest City development, the future home of 700,000 people, as tightened controls on outbound capital flows put a squeeze on Chinese buyers trying to buy homes overseas.
In Melbourne, the developer may be less reliant on mainland buyers to scoop up houses in its planned community. Country Garden is planting its flag in a roaring housing market where prices have surged more than 55 percent over the past five years, creating an affordability crisis for the city’s residents.
Shanghai-based builder Dahua Group last year muscled out local developers to snap up three large residential sites in the western Melbourne suburb of Point Cook for A$347 ($264 million).
Country Garden, which ranked as China’s third-largest mainland developer with sales of RMB 258 billion ($37.2 billion) last year, says it has 300 projects under construction around the world.