Chinese eye property plays

A western suburbs real estate agency has set up a dedicated China marketing arm, as growing numbers of Chinese developers eye Perth’s burgeoning apartment market for large project opportunities.

Acton Dalkeith agent David Eyers said the firm had teamed with Acton Cottesloe to promote Perth as a preferred destination for Chinese investment capital.

The agencies have jointly aligned with three real estate offices in China to provide opportunities for Chinese buyers to not only identify potential property purchases, but also sign sales contracts.

Mr Eyers said Australia was second to the US in popularity for Chinese property investors, but historically the majority of offshore funds had been funnelled into the Melbourne and Sydney markets.

Acton Dalkeith sold more than $36 million worth of homes during the past two months, with 20 to 30 per cent of inquiries coming from Chinese buyers, Mr Eyers said.

He said the biggest draw for Chinese buyers was Western Australia’s highly regarded universities.

“It makes it easier if they’re buying property if they are coming here for school reasons,” Mr Eyers told Business News.

“Investment return is also good; generally they get a good return on those investments in capital growth over time as well.”

Colliers International residential director Jo Anne Chin said local apartment developers were also starting to sharpen their focus on attracting Asian capital, particularly from China.

Business News reported earlier this year that Perth-based developer Devwest Group had established extensive links to China that spanned back more than a decade, sourcing about 50 per cent of its development capital from that country.

However, Ms Chin told Business News that most apartment development firms in Sydney and Melbourne were well ahead of Perth in creating strong marketing links in Asia.

“We haven’t had that here, so our buyer market has been a really good mix of investors, owner-occupiers, downsizers and the local Asian market,” Ms Chin said.

“To go over to the Asian market, it has to be the right product, and it’s only recently that our local developers have started to explore that.”

Momentum Wealth managing director Damian Collins said Chinese development firms with a substantial amount of capital were starting to take an interest in Perth’s booming apartment construction sector.

“They’re talking 100 to 200 units as their bare minimum, that’s the sort of projects that they are looking at,” Mr Collins told Business News.

One such project is the $100 million, two-tower mixed-use development, Pinnacle in South Perth, put forward by Chinese group Zone Q Investments.

Zone Q is planning to build 102 luxury apartments in a 20-storey tower, as well as a 12-storey commercial office building, at a site on the corner of Charles Street and Labouchere Road.

Another Chinese developer, the identity of which has not been disclosed, bought the old Matilda Bay Brewery development site in North Fremantle for $36 million in August.

The prospect of a large-scale apartment development at the former brewery has caused consternation among Fremantle locals, after the City of Fremantle moved to allow construction of up to 11 storeys at the site.

Mr Collins said large Chinese developers such as Zone Q, which is a subsidiary of the massive JiaHe Jian Group, investing in Perth would give a significant boost to the offshore profile of Perth property. 

But Mr Collins said there hadn’t historically been a lot of Chinese buyers for finished apartment products in Perth.

“Perth just doesn’t yet seem to be on their radar,” he said.

“We’ve been a strong market for Indonesia, Malaysia and Singapore for a long time but the mainland Chinese market is still very Sydney and Melbourne focused.”