Fosun Acquires Sydney Office Building for $93M as Chinese Catch Oz Fever

Fosun Property, the real estate arm of China’s largest privately held investment conglomerate announced today that it had acquired an office block in Sydney, Australia for A$116.5 million ($93 million).

The Shanghai-based property investment company will add 73 Miller Street in North Sydney to its growing portfolio of international real estate assets that already includes the former One Chase Manhattan Plaza in New York, as well as properties in Tokyo and Athens.

Fosun’s announcement comes just one day after China’s Dalian Wanda announced its own $1 billion project in Sydney and adds to a wave of Chinese-funded deals that have moved Sydney into the number two position globally for real estate investment by Chinese firms.

Fosun Joins With Aussie Real Estate Firm for Deal

For its Sydney deal Fosun teamed up with local Australian property investment and asset management company, Propertylink, to purchase the eleven-storey building from Morgan Stanley subsidiary Investa Property Group. 73 Miller Street has a net lettable area of 14,672 square feet and is 100 percent leased to the government of New South Wales.

While the current lease of the building has four more years to run, Fosun and PropertyLink are likely to have redevelopment of the 2324 square metre site in mind. In the online listing for the property consultancy Knight Frank, which brokered the deal on behalf of Investa, noted that, “The property is underdeveloped presenting future opportunity to considerably increase the property’s net lettable area.”

Peter McDonald, Head of Property for Propertylink commented that, “This is an outstanding value-add opportunity to reposition the asset given the prime location and amenity.”

Australia Becomes the #2 Destination for Chinese Real Estate Investment

Chinese companies have been buying Australian real estate for years now, but the pace of acquisition has increased markedly in the last six months, with Sydney now becoming a global focus of investors from China.

Guo Guangchang, chairman of Fosun said, “The Australian property market is well known for its stable growth and transparency. It is also the reason why Australia attracts so much attention from Asian investors including from China.”

According to a study released this week by property consultancy JLL, Sydney is now the second biggest target for Chinese property investors, trailing only London. Australia attracted over $3 billion in Chinese real estate investment last year, according to the agency’s figures, surpassing North and South America to rank second only to Europe.

Sydney received the bulk of this Chinese attention down under, pulling in $2.2 billion to move into second-place globally for Chinese property investment, to rank the city above New York, Los Angeles and Paris in terms of its appeal to Chinese investors.

On Monday, Dalian Wanda formally announced its acquisition of two sites along Sydney Harbour, as well as its $1 billion plan to transform the location into a new mixed-use development. Other leading Chinese property developers including Shimao Holdings and Poly Real Estate have all made deals in Sydney in recent months. Shanghai-based Greenland Group already has six projects in Australia and is said to be looking for more.

Fosun Expands Its Footprint in Australia

The office building acquisition is Fosun’s second Australian purchase in the last three months, after the Hong Kong-listed company bought out oil and gas player ROC Oil in November last year.

Fosun has also made headlines in Europe recently by outbidding a broad field to acquire France’s Club Med and acquired two office buildings in Tokyo during the second half of 2014.