Perth's upcoming development pipeline has a distinctly international flavour.
International funds are flowing into Perth’s property sector at a rate that belies the current economic downturn, with up to $5 billion in hotel, apartment and office developments proposed by offshore groups across the city.
The latest development proposals involve a revival of the stalled residential component of the Perth City Link, after the Metropolitan Redevelopment Authority enlisted the help of two international groups.
Far East Consortium, which is behind the $500 million Ritz-Carlton & The Towers at Elizabeth Quay, is planning to invest hundreds of millions at Perth City Link, having won the right to develop four of the urban regeneration project’s vacant lots.
The Hong Kong-based firm had already been planning to spend $220 million developing a Dorsett Hotel and retail complex on two City Link lots, under a deal announced late last year.
Earlier this month, the MRA revealed that Far East Consortium would hold an international design competition for a project of up to 350 apartments on Perth City Link land, in addition to its hotel plan.
At the same time, the MRA said Brisbane-based Cedar Pacific, a joint venture between institutional investment groups from Switzerland and Canada, would build a 550-bed student accommodation facility on Perth City Link land.
The City Link projects follow the revelation early this year that Jordanian billionaire Ghazi Abu Nahl, chairman of the World Trade Centers Association, had committed to a $1.85 billion, 75-storey development at the old Megamart site on Beaufort Street.
While its proposal remains in the early planning stages, the scale of the World Trade Centers Association, a prolific developer across the globe, has eased concerns that it was another large project destined to never become reality.
While the World Trade Centers proposal would be Perth’s tallest building, Singapore’s Fragrance Group is well advanced on a pipeline of works that could have an end value of up to $1.5 billion.
Probuild will start work on the first of three Fragrance Group projects next month – the $500 million NV Apartments on Murray Street. Fragrance Group has also proposed a major hotel and apartment project on Milligan Street, as well as a 62-level, 480-room hotel at the old St Andrew’s Church site on St Georges Terrace.
In total, the Singaporean developer, led by self-made billionaire James Koh, has around 850 apartments and 1,370 hotel rooms in its immediate pipeline.
Scanlan Architects director Laurie Scanlan, who provided design services for Fragrance Group’s three Perth projects said Mr Koh first visited Australia around 20 years ago, seeking development opportunities initially in Hobart, then in Melbourne.
“Mr Koh has done a couple of hundred developments around Singapore and Asia, so he has a really good track record of development,” Mr Scanlan said.
“He has got his own hotel chains under the Fragrance Group brand and under the Park Sovereign brand, but his development model is basically looking at opportunities to own hotels, and sell apartments, which complement the hotels.”
Mr Scanlan said Fragrance Group’s willingness to pursue large-scale projects, the size of which had rarely been proposed in Perth, was typical of many overseas groups, which tended to take a more long-term outlook than local counterparts.
“These groups are just not scared of taking a long-term position and going for 400 apartments,” Mr Scanlan said.
“Clearly this is also based on an overseas appetite for the product.”
The other major differing factor with overseas developers, like China’s 3 Oceans Property, which last week lodged a development application for a $400 million, 40-storey project in Scarborough, is the lack of reliance on traditional sources of development finance.
Earlier this year, 3 Oceans managing director Dyno Zhang told Business News there would be no pre-sales requirement for the 300 apartments on offer, a sharp contrast to the 75 to 80 per cent pre-sales thresholds forced on developers by Australian financiers.
Business News understands 3 Oceans is also formulating plans for a major development on the Matilda Bay Brewery site in North Fremantle, which it bought in 2014 for $36 million.
Malaysian developers also have their eyes on Perth in a big way, none more so than reclusive billionaire Victor Goh.
Mr Goh’s development vehicle, AAIG, is behind the Capital Square office development currently under construction, but it is through two joint ventures with Adrian Fini at Elizabeth Quay that AAIG is expected to make a bigger impact on Perth.
Messrs Goh and Fini’s first Elizabeth Quay project, EQ West, is estimated to have an end value of around $385 million and will comprise a 45-level, 300-apartment tower and a separate 20-level serviced apartment and hotel building.
A development application for the project was recently lodged with the City of Perth, while another joint venture between Mr Goh and Mr Fini was revealed as the winning bidder for the last two vacant lots up for sale at Elizabeth Quay earlier this year.
That plan remains in its preliminary phases, but early indications are that it will include a mixed-use tower incorporating a short-stay apartment hotel and post-graduate education facilities.
In a rare interview with Business News late last year, Mr Goh said developing iconic projects at Elizabeth Quay was an opportunity to give back to a city he was fond of.
Mr Goh, like Mr Koh, had previously evaluated a number of Australian cities looking for an investment destination, but unlike his Singaporean counterpart, Mr Goh decided Perth would be his exclusive focus.
Another prolific Malaysian developer, SKS Group, is increasingly active in Perth, with four Hilton-branded hotel proposals in a pipeline worth more than $300 million.
Work is under way on two SKS Group hotels – DoubleTree by Hilton properties in Northbridge and at Barrack Square – while there are plans for a third DoubleTree in Fremantle, and a Hampton Inn by Hilton at Cockburn Central.
SKS Group is also active in apartment development, having paid $9.2 million to take on stalled apartment project Hawthorne Green in Burswood in October 2015.
The developer also owns an apartment development site in West Perth at 581 Murray Street, which it bought from Subiaco-based Devwest Group in 2014 for $10.8 million.