Billionaire Lang Walker, founder of one of Australia’s largest closely held developers, said that home prices in Sydney and Melbourne have climbed too much, and he is turning his focus to his investment in Malaysia.
“Sydney is a little too hot at the moment,” Walker, executive chairman of Walker Corp., said in an interview in Singapore yesterday. “Melbourne has gone through a period of intense growth and that’s plateaued off.” The residential market in Brisbane, in Queensland state, still has some potential, he said.
Dwelling prices in Sydney jumped 14.8 percent in July from a year earlier, the fastest growth among all Australian state and territory capitals, according to the RP Data-Rismark Home Value Index. Melbourne prices rose 11 percent, the second-fastest increase, and Brisbane increased 6.9 percent.
Walker, with A$12 billion ($11.2 billion) of planned property projects, said he is looking to increase investments in the Johor region in southern Malaysia after putting in about A$2 billion in the Senibong Cove project. Walker is in talks for further investments in the city of Johor Bahru as he bets that demand from neighboring Singapore will increase, he said without elaborating.
Residents of Singapore, Southeast Asia’s richest city, are crossing over to Malaysia’s Iskandar region, as they seek property, labor and amenities, often at half the cost or less. Economic growth and soaring immigration have strained Singapore’s resources, making it one of the most expensive places to live in the world.
With cheaper land plentiful in southern Malaysia, money is pouring across the border. Singapore has invested at least 11 billion ringgit ($3.4 billion) in Iskandar Malaysia, a special economic zone in southern Johor established in 2006 that’s three times the size of the city.
Walker is converting land, previously used for prawn-breeding farms, into swanky apartments. The project is expected to be valued at about A$7.5 billion along with an adjoining plot it will develop with a Singapore-based company, he said.
“It’s the leverage off Singapore,” Walker said. “Singapore is very expensive. We can create and produce a product which is similar to what you get here in Singapore or Australia.”
Walker Corp. made its foray into Asia in 2008 with a 5.5 billion ringgit investment to develop Senibong Cove, a waterfront residential project.
Walker is developing Australia’s largest commercial project, Collins Square in Melbourne’s central business district, valued at about A$2 billion he said.
The number of unsold homes in Melbourne fell 11.4 percent in July from a year earlier in an increasingly active market and fell 8.7 percent in Sydney. That compares with a national average of a 4.8 percent decline, according to Sydney-based researcher SQM Research Pty.
In Australia, Walker jointly developed The Wharf at Woolloomooloo, a A$300 million project that involved the refurbishment of a 400-meter (1,312-feet) heritage wharf on the fringe of Sydney’s central business district. The development includes apartments, hotel, restaurants and a marina.
(An earlier version of this story corrected the conversion in the last paragraph.)
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