Greenland Holding Group Co., one of the largest Chinese investors in the U.S., sold about A$275 million ($250 million) of apartments at its first Australian project as buyers snapped up almost all of the units offered.
The state-owned developer sold 241 of 250 apartments released in the first stage of Greenland Centre, the 66-floor central Sydney tower expected to be the tallest in the city, said David Milton, managing director for residential projects at selling agent CBRE Group Inc. The most expensive was a three-bedroom unit on the 55th floor, which went for A$3.7 million to a Chinese buyer living in Australia, he said.
“We had enormous interest, about 4,000 in the four to five weeks leading up to it,” Sydney-based Milton said in a telephone interview today. “This has been one of the most highly anticipated projects, with one of the highest level of inquiries that we’ve had.”
Greenland has invested more than A$1 billion on sites in Sydney and Melbourne, Australia’s two most-populous cities and the areas that are seeing the highest level of demand from mainland buyers. The company joins Chinese developers, including Dalian Wanda Group and ABP (China) Holdings Group Ltd., which are moving overseas as the government maintains curbs to cool the housing market at home.
The expansion of Chinese companies abroad follows an “explosion” in Chinese individual purchases of luxury western products, overseas holidays and homes, according to an August report by broker Savills Plc.
“This combined with increasing competition in the domestic property market and the weakness of overseas markets, has presented good opportunities for China to acquire land, resources, companies, brands and real estate,” James MacDonald, associate director for China research, wrote in the report. Mainland China and Hong Kong together were the second-largest source of investment in overseas markets between 2008 and 2011, accounting for $146 billion, second only to the U.S., he said.
Greenland is emerging as one of the largest Chinese investors in the U.S. The company in October signed a memorandum of understanding to buy a 70 percent share of Brooklyn’s $5 billion Atlantic Yards project. Greenland’s investment in the 22-acre (8.9-hectare) development involves 14 apartment buildings and one office property.
The company is also planning to begin investing in London, and is seeking projects including hotels, apartments and retail in the city, Chairman Zhang Yuliang said in an interview in October. The company, which has investments in almost all of China’s cities, sees overseas expansion as “a must,” Zhang said then.
“The trend for Chinese companies going abroad has just started,” Zhang said in the group interview. “Every Chinese company goes out for its own reason, but the common ground is seeking globalization.”
In Australia, Greenland follows Asian developers including Singapore-based Frasers Centrepoint Ltd., which is building a 2,000 apartment development in partnership with Japan’s Sekisui House Ltd., in Sydney’s center. Hong Kong’s Far East Consortium and Malaysia’s SP Setia are building apartment towers in Melbourne, adding more than 2,000 units in total.
They’re being driven by apartment prices that are out-pacing growth in the rest of the nation’s cities. Prices jumped 11 percent in Sydney and 7.2 percent in Melbourne this year to Nov. 30, according to the RP Data-Rismark home value index.
Lend Lease Group, Australia’s biggest listed property developer, in August sold all 159 waterfront apartments in the first stage of its Barangaroo redevelopment in Sydney’s center within 3.5 hours of their release. The company received more than 6,500 inquiries, with sales including a two-level, four-bedroom penthouse for A$10.5 million, it said in a statement at the time.
About a fifth of the sales were to buyers from the mainland, Paul Shaw, head of Lend Lease’s apartment business, said in an interview.
Greenland began sales simultaneously in Sydney, Shanghai, Hong Kong and Singapore over the weekend for the apartments, whose prices start at A$528,000 for a studio, Milton said. About a quarter were sold to overseas buyers, he said.
A date hasn’t been announced for the release of the second stage with 220 apartments, he said.
The start of construction depends on the development approval, which the company is in the process of obtaining, Sherwood Luo, managing director of Greenland Australia, the company’s Sydney-based subsidiary, said last month.
Greenland plans to build about 1,000 apartments on its first Melbourne site, which it agreed to buy last week from Racing Victoria.
The Shanghai-based company said in 2010 that it will invest 30 billion yuan ($4.9 billion) to build a 606-meter (1,988-foot) skyscraper in the central Chinese city of Wuhan.
The 660-meter Ping An Finance Center in the southern city of Shenzhen will be China’s tallest building when it is completed 2016, according to the skyscraper center database of the Council on Tall Buildings and Urban Habitat. China’s tallest building currently is the 492-meter Shanghai World Financial Center.
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