Asian buyers' $1 billion war chest

Flush with cash, Asian investors have mandates with agents to buy more than $1 billion of office space, shopping centres and industrial warehouses across Australia.

Flush with cash, Asian investors have mandates with agents to buy more than $1 billion of office space, shopping centres and industrial warehouses across Australia.

Recently, Bright Ruby, a Singapore-based Chinese investment group, spent more than $260 million buying two properties in Sydney. The group is said to be looking at spending up to $500 million on office towers across the country, including in Melbourne.

China's HNA Group has also entered the market with the purchase of a Sydney property for $117.7 million. It is also believed to have a large amount of cash destined for the office market.

The new wave of Asian, and in particular Chinese, investors follows in the footsteps of companies such as Ipoh, Government of Singapore Investment Corporation, China Investment Corp and the Keppel Group's K-REIT.

These groups own big office and retail assets across the country.

At the NSW Property Council's Asian investment forum in Sydney on Friday, panellists said the amount of money coming to Australia from Asia was immense.

Duncan Calder, a KPMG partner in Western Australia, told the forum the Asian interest had "huge potential for Australia".

"For every $2 in China that's invested here, there is about $20 from Britain and America," he said. "But sometimes Australia can be too arrogant and too confident. The lines of communication need to be better to attract that Asian money."

Mr Calder said now was the time for Australian companies and investors to start talking to their Chinese clients because building relationships took time.

The president and chief executive of CBRE in Australia and New Zealand, Tom Southern, said competition for property was rising among local super funds, real estate investment trusts and new Asian investors.

"What we need from Asia is occupiers of the offices as much as the capital," Mr Southern said.

"But what the Chinese are willing to do is invest in development. Our banks have become derelict in their duty to fund our development sector. That's where the Chinese have come to provide the capital as they understand development risk."

Related Articles