Poly Australia, Shanghai-listed Poly Real Estate’s Australian arm, is looking for A-grade office investments in Melbourne’s CBD, according to The Australian. The news comes less than two months after the developer purchased a pair of buildings near Sydney’s Circular Quay for A$160 million ($121.6 million) with plans to develop them into a new A-grade office tower.
The July acquisition of the two buildings at 210-220 George Street in Sydney from Anton Capital marked the first time Poly Australia bought an asset with the intention of developing an office tower. Now it appears as if the developer has similar plans for Melbourne, despite having lost its bid for Telstra Tower earlier this year to SP Setia, one of Malaysia’s largest property developers.
“We will certainly look at Melbourne CBD office, A-grade office in the CBD. Whether we take it as a development play, or whether we take it as an asset and hold, it really depends on the opportunities there,” Philip Best, Poly Australia’s sales and marketing director, was reported as saying. “We see the Melbourne office market being stable to strong.”
Research from Savills found that commercial office sales in Melbourne hit record highs for a 12-month period in June with A$2.8 billion ($2.1 billion) sold. Foreign investors accounted for 69 percent of these transactions.
Poly Real Estate Focuses On Australia’s Residential Market
Poly has been active in Australia since entering the market in 2014. At the end of last year, the Guangzhou-based firm revealed ambitious plans to become the country’s third largest property developer during the next decade.
The 210-220 George Street is only the second time it has purchased non-residential real estate in Australia. The first acquisition, a business park in the Sydney suburbs, was bought from the Goodman Group with the intent to develop three residential towers on the site.
The developer’s focus down under continues to be residential with the Sydney suburbs project just one of many in the works. Poly acquired a majority stake in Australia-based Chinese-backed Southlink and is working with them on the Claremont Manor project in Melbourne.
In August, the developer launched sales for its 67-lot Grove Place project in the Sydney suburb of Werrington.
Chinese Developers Turn Australian Office Towers Into Residences
While Poly is not the first mainland developer to purchase an office tower in Australia, it is among the first to aim at the office market with intention of developing and leasing commercial space.
In 2015, Dalian Wanda bought the Gold Fields House office block from Blackstone for A$415 million ($329 million). The Beijing-based developer is building its 85,000 square metre (914,935 square foot) No.1 Sydney mixed-use project on the site, with much of the project’s focus on selling condo units to global buyers.
Billionaire Hui Wing Mao’s Shimao Property announced it purchased an office block at 175 Liverpool Street near Sydney Harbour for $324 million from Singapore sovereign wealth fund GIC in 2014.
Bernard Chiu, a lawyer and property adviser who has been a local director at Shimao, told The Australian that the developer plans to hold the property as an investment for seven to eight years before redeveloping it.