Regional Economic Development

Chinese investment changes real estate industry

JEWEL, a $1 billion residential resort complex currently rising over the Gold Coast, is probably the most visible proof to date of how rising Chinese investment in Australian property development is changing the landscape forever.

The multi-tower residential and resort project is backed by Asia’s richest man Wang Jianlin, and is the largest single project of the estimated $12 billion in Chinese investment in Australian property in the last financial year.

As evidenced by his substantial investment in Jewel, Mr Wang – who is chairman of China’s largest property development firm Dalian Wang – has set his sights firmly on Australia, stating his home country no longer held potential for easy profits. Yet for China’s ever-widening middle class, the appeal of Australian real estate stretches well beyond such hgh-profile developments. 

A characteristic of Asian families is their determination to seek better educational opportunities for their children – and a feature of recent investment in Australia has been a preference for property located near reputable Australian schools and universities, countrywide. For those with the means, purchasing foreign real estate equates to a long-term investment that is safe from Chinese Government intervention.

According to the Foreign Investment Review Board, Chinese buyers of real estate accounted for close to half of the total $27.7 billion foreign investment in Australia in 2014.

Juwai, China’s leading international property portal, ranks Australia as the second most popular destination for Chinese buyers, just behind the US, with its appeal rising recently against the background of the softer Australian dollar.

While the big-ticket sales of waterfront mansions and grand commercial developments create headlines, mid-range off-the-plan apartments and family homes in the suburbs increasingly form a large segment of listings on Juwai – a Shanghai-based, Australian-founded Chinese language property website.

It all adds up to a seismic shift in the Australian property market – a shift that real estate agents are having to adapt to fast, according to Real Estate Results Network (RERN) chief executive, Michael Sheargold.

“The real estate industry has evolved at a rapid pace over the last few years, with agents now working within a truly international marketplace yet also having to adapt their business model to accommodate the differing needs of clients in those emerging markets,” Mr Sheargold said.

He said while the spoils of China’s dramatically increased buying power and relaxed central restrictions were once confined to major centres, offshore buyers were now eyeing property across the country – reshaping the playing field for real estate agents seeking to capitalise on this sizeable new segment of the market.

“Agencies looking to set their business on an effective course for development must not only keep their eyes open to industry change, but also engage with new technologies and strategies to ensure their business is pursuing those new leads as we see a strong continuing trend of investment from Asian buyers,” Mr Sheargold said.

He has been driving change within RERN, to provide spcialist industry training, support, mentorship and resources for real estate agencies wanting to understand and develop the growing China market..

He said with a surge of 400 percent in Chinese purchases of Australian real estate over the last five years, many property agents have employed Mandarin-speaking staff to provide assistance and handle negotiations with overseas buyers, while also adapting their business websites to include Chinese layouts.

As part of a strategic effort to market property internationally, listings and promotional materials have also been translated into Chinese, in recognition of the far greater level of engagement achieved when targeting investors in their native language.

“We know that the internet is the first port of call for interested property investors worldwide, but reaching the Chinese market is more complex than an agent simply making their listings available online, even if they are translated into Chinese language,” Mr Sheargold said.

“The existence of firewalls means many international websites and social media sites are blocked to those within China, so to gain visibility agents are seeking to advertise their listings on locally hosted sites.”

For those agencies who have achieved successful inroads into the market, Mr Sheargold said it was prudent to establish a physical presence in China. This could be initiated by a trip to attend property expositions and meet with potential clients, as well as seek to form strategic alliances with local agents and development companies.

“China is in fact the perfect representation of the advantages of belonging to a network – the ethos on which RERN has been founded,” Mr Sheargold said. “In China, even more so than in the west, we see the success of business hinges on socialising and networking with like-minded individuals.

“The foundations for many deals are made in social contexts and for this reason, local agents find travelling to China to form personal ties with agents and buyers, by attending specialised industry conferences or meeting with local agencies, will lead to an improved ability to understand local customs and respond to the needs and interests of buyers in those markets.”

Mr Sheargold said establishing direct agent representation in China, or even opening a branch in cities such as Beijing or Shanghai, was a logical progression for agencies invested in major sales from the market.

Howeer, he said, independent agents in Australia could also work towards growing their brand in the Chinese marketplace through each personal interaction, alongside repeated exposure, through building a database of quality property listings geared towards the Chinese buyer.

Mr Sheargold said the spread of the Asian market was just another way the real estate industry model had changed, with RERN committed to providing expert support and services to help agencies and their teams reach their full potential in the new marketplace.

www.realestateresultscentral.com.au

 

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Jupiters’ $345m refurb. is iconic for Gold Coast

AUSTRALIAN tourism’s most significant hotel refurbishment and extension is underway at Jupiters Hotel and Casino, on the Gold Coast, as Star Entertainment, formerly Echo Entertainment Group, progresses with the property’s $345 million transformation.

Star Entertainment Queensland managing director Geoff Hogg said the revitalisation of Jupiters’ Hotel was the first major upgrade in the history of the property that, when it was built in the mid-1980s, re-defined luxury accommodation and entertainment on the Gold Coast.

“The extensive renovation will see all rooms completely revitalised to offer both business and leisure travellers a world-class experience,” Mr Hogg said.

While the $75 million initial revitalisation of the property’s almost 592 rooms, together with work already completed around the pool and hotel façade, will be completed in 2016, construction has launched on the 17-storey, luxury six-star suite tower at the front of the property.

The 80-suite tower offers what is known as a ‘six-star’ experience and features some of Australia’s most luxurious accommodation environments. 

“The six-star hotel is the signature piece of the transformation of Jupiters which will redefine luxury and take personalised service to a completely new level,” Mr Hogg said. “It is the centrepiece of what will be the most exciting part of the development.”

Mr Hogg said the hotel targets high value travellers and so-called ‘high-rollers’ gambling guests, especially those from Asia.

Suites range from one to four bedrooms and all have private balconies with extraordinary views over Gold Coast beaches and the Hinterland. The top 10 levels feature what are being called ‘super-suites’ with huge balconies that even offer guests indulgent ‘bathtub views’ of the Pacific Ocean.

The strong focus on getting the in-room experience right at Jupiters Hotel is indicative of the amount of focus Star Entertainment Group is placing on developing its Queensland properties.

Mr Hogg said the team worked with six prototype rooms in early 2015 to help shape the details and ensure the end product delivered an experience visitors to the Gold Coast would go home talking about.

“The prototype rooms have given us the ability to work closely with our team and selected guests to get their feedback on design, functionality and the ambiance of each room, and the response we’ve had so far has been fantastic” Mr Hogg said told the Gold Coast Bulletin.

Internationally renowned architects Steelman Partners styled the rooms in a way that aimed to create a sophisticated and modern feel that would complement the Gold Coast’s relaxed beachside lifestyle. This vision has been delivered on the Gold Coast by ML Design, a respected South East Queensland architectural practice.

The rooms feature  state-of-the-art lighting and technology, iPad connectivity and smart televisions, while offering guests the very best in terms of luxury finishes, including marble and stone sourced from Italy and Turkey, rain-head showers and luxurious new bedding.

Mr Hogg said new digital signage has also installed throughout the property, particularly to guide hotel guests who are visiting for a conference or event.

www.jupitersgoldcoast.com

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Can infrastructure reforms restore productivity?

AUSTRALIAN competition reforms – proposed by the Harper Review – can boost national prosperity and recover from many years of poor infrastructure policies and practices.

That is the view of Australian Competition and Consumer Commission (ACCC) chairman Rod Sims.

“We see policies that prevent competition in coastal and liner shipping, inadequate dedicated rail freight paths, a poor policy framework for road investment, limits on supply and competition in urban water, costly past rules for energy network regulation, limits on infrastructure competition in many areas, and I could go on,” Mr Sims told the recent Infrastructure Partnerships Australia conference in Sydney.

“Into this environment comes the Harper Review of competition policy. It is extremely timely, and has important recommendations on many fronts.” 

Mr Sims said three areas would further harm Australia’s future productivity and prosperity if not addressed: road reform, privatising infrastructure assets with the wrong objectives in mind, and monopoly rent extraction by asset owners.

Mr Sims pressed the need for road reform, outlining a way ahead that is “entirely doable and saleable” with two steps.

“First, the revenue raised from road use should flow directly to the entities that build and maintain our roads,” he said. “Second, the level of these road user charges should be set based on the need for future road expenditure.”

Mr Sims warned against privatising infrastructure assets in situations where immediate financial benefit became a ‘tax’ on future generations.

“Some of Australia’s key infrastructure assets, including significant ports and railways, are likely to be privatised in the coming years,” Mr Sims said. “The value of the assets to be sold is likely to be high and governments have begun announcing projects they will invest in as a result of the profits generated from these privatisations.

“This creates a strong incentive for governments to structure their privatisation processes in a manner that maximises the sale price they receive. In order to maximise sale prices, governments will have little incentive to closely examine whether the market structure and regulatory arrangements that will apply post-privatisation are conducive to competition and appropriate outcomes.”

Mr Sims warned about infrastructure owners possibly engaging in “monopoly rent extraction” – challenging the view that policy makers should pay no attention to the ability of a bottleneck monopolist to extract rents from upstream or downstream firms in a commodity export supply chain.

“Monopolies can be harmful in that they can limit investment and innovation in upstream or downstream industries. Monopolies, therefore, generally require effective economic regulation.”

www.accc.gov.au

 

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Ipswich turns old fire station into a business hotbed

According to a report by Accenture for the City Initiatives for Technology, Innovation and Entrepreneurship (CITIE) group, delivered at the 2015 Asia Pacific Cities Summit in Brisbane, cities are hotbeds for developing innovative, fast-growth businesses. The City of Ipswich in Queensland is firing up that concept by creating its new business incubator in the former Ipswich Central Fire Station it now owns.

By Mike Sullivan

IPSWICH City Mayor, Paul Pisasale, has never been backward in coming forward – and he doesn’t mind taking the lead on what’s good for his city. So it comes as no surprise that Ipswich City Council is helping start-up businesses to find their feet – but it is surprising how much support the council is throwing behind local entrepreneurs and innovative early-stage businesses.

“It’s the way the world’s going and it’s the way the city is going,” Cr Pisasale said. “We are ahead of the game.

“You have got to look after your neighbourhoods and your early stage businesses. Incubators and technology is the way of the future.

“It’s where the  future jobs are and where we are all heading … and if you don’t head there your city is going to be lost and won’t have the communication that is needed to take this thing forward.” 

The momentum behind the Ipswich incubator is what is revealing. The council has bought the old Ipswich Fire Station in the heart of its central business district and is re-fitting and re-purposing it as a hub for entrepreneurs. The complex will be named 1860, for the year Ipswich became a municipality.

But Ipswich is a smarter city than just re-purposing property – it is doing so in alliance with local business mentors and support services to provide the business development environment and skilling ‘software’ to go with the ‘hardware’ within the incubator.

The city has also had a long look at how other incubators are working around the world, especially taking a lead from the successful Chicago digital business incubator hub, named 1871. Chicago’s hub took its name not from the great Chicago fire of 1871, but for the innovation that came in the disaster’s aftermath.

DIGITAL RECORD

Ipswich is not making things up as it goes along – the South East Queensland city has a substantial record for innovation and hi-tech business development in its own right, including Australia’s largest aerospace precinct at Amberley.

In 1994 the city was also the first in Australia to set up its own internet service provider (ISP), Cr Pisasale said. Ipswich’s thriving satellite city of Springfield was the one of the earliest developments to provide for broadband connectivity for all new homes and its commercial district. The Polaris Data Centre development at Greater Springfield was also one of Australia’s first major commercial data centres.

“You have got to go back to 1994 when the city became the first one in Australia to set up its own ISP,” Cr Pisasale said. “No-one had even heard of the internet or even had an e-mail address.

“We went down that path, because we could (even then) predict that the jobs of the future were in technology. Then you had iTel and the other things we got involved in. This is the next step in that journey.”

He lamented the fact that the National Broadband Network (NBN) had been mired in political and regional arguments over the technical aspects of the roll-out.

“What they should be talking about is what it is going to do to enhance your community or your city,” Cr Pisasale said. “So that’s where we are heading. We know the power of that, making your city able to communicate anywhere in the world and being able to run your business from it.”

The 1860 business incubator program is just one aspect of the lead Ipswich is taking in helping to foster business development in the global digital economy. Ipswich also this year appointed Matthew Schultz as its first city digital officer and he has been instrumental in helping to establish the incubator.

Cr Pisasale said 1860 was being established as a both a physical and online hub, but with vital business local networks engaged in its formation and operation. 

“Councils are very good at giving out sporting bursaries and cultural bursaries, but what this is all about is giving out those bursaries to pick up the entrepreneurs in your community,” Cr Pisasale said. “It will pick up start-up businesses that you can nurture and help survive with mentors.

“And finally it will help to train people out there who are so busy being busy that they don’t know how to take their businesses forward – and if they don’t do this, they’ll fold.”

Cr Pisasale, who wears an Apple Watch primarily to receive council and community messages, said the city was well poised to reap the benefits of the digital age because the council was already attuned to its potential.

“It’s about how you embrace technology,” he said. “We are seeing it – not only in the jobs that are being created, but also in the age demographics of the city.

“The state average is 36 (years) and we are 32 and declining – so young families are coming into this city and becoming involved. The young people, they get it.

“The City of Ipswich is going to be known as a city of innovation now. The key for us is that there are no more boundaries,” he said, remarking that Ipswich was recently voted in the top seven Most Intelligent Communities in the world by the Intelligent Community Forum in New York.

He said it proved Ipswich’s challenges and opportunities were no longer focused in Australia but “we are worried about China and Taiwan and Hong Kong and the US and the UK …”

Cr Pisasale said the 1860 hub would energise the Ipswich business community.

“It’s really the Olympics of information. The Olympics of technology,” Cr Pisasale characterised the business development environment. “We see them (Ipswich entrepreneurs) running the Olympic 100m … and someone saying that idea came out of Ipswich.

“More importantly, the idea did not go overseas and come back. I want to sell it to overseas, but I want to make sure the nurturing place was Ipswich and Australia.”

www.ipswich.gov.au

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Walkabout Creek shows how national parks can make commercial gains

EXTRA >>

INTRODUCING  commercial opportunities to national park design – while still keeping sustainable outcomes – has drawn innovative changes to the Walkabout Creek Visitor Centre at Brisbane suburb The Gap. The centre is located within the popular D’Aguilar National Park.

The moves are part of the Queensland Government’s Gateway Visitor Centre Master Plan that aims to encourage ecotourism through a $3.6 million investment in the three parks — David Fleay’s Wildlife Park on the Gold Coast, Walkabout Creek Visitor Centre near Brisbane, and Mon Repos Turtle Centre near Bundaberg. 

Lat27, the master planners for the redevelopment of two of these Gateway Visitor Centres — the Walkabout Creek Visitor Centre and the Mon Repos Turtle Centre – have been working with the Queensland Parks and Wildlife Service to deliver what State Member of the area, Kate Jones has called “exciting new concepts that will make the parks more attractive to tourists, encourage active lifestyles and ensure the long-term environmental and commercial sustainability of the centres”.

The Lat27 master planning team was tasked with exploring viable commercial opportunities at Walkabout Creek to increase visitation and greater exploration of the D’Aguilar National Park. The resulting vision was founded on sound business modelling and extensive research into compatible activity providers, according to Lat27 urban design director and project leader, John Ilett.

Mr Ilett said the new approach carefully balances environmental requirements with sustainable user engagement and, where feasible, potential commercial partnerships into the future.

“Our role was to work with the Long View Group Consortium team, QPWS (Queenland Parks and Wildlife Service) and other key stakeholders to create new facilities and activities that will provide a more engaging and accessible space for visitors, whilst ensuring our unique natural environments are maintained and protected.

“Our pilot project, the swimming beach and canoe launch at the Enoggera Reservoir, has been very positively received by the community and these facilities have been used every day since they opened in mid-December 2014,” he said.

“This is just the response we were looking for — we wanted to attract and engage both locals and tourists alike and  provide spaces where visitors of all ages can get active and enjoy our natural environment in a fun and interactive way — a taste for further exploration of D’Aguillar National Park.

“Lat27 is currently working on designs for an Activity Centre which will include an events lawn, activity trails and nature play nodes throughout the park. Future initiatives will include a Junior Mountain Bike Skills Park and potentially a Zip Line course.

“All of the initiatives, when implemented, will transform Walkabout Creek Visitor Centre and capitalise on one of our key local natural assets.  It will be a much-loved activity space and one of Brisbane’s ‘must do’ destinations for generations to come,” Mr Ilett said.

State Member for Ashgrove, Kate Jones, said, “The new canoe launch site and swimming area at Enoggera Reservoir are proving very popular with the local community and are helping to boost visitation to the Frog Tree Café and wildlife displays at the Walkabout Creek Wildlife Centre.”

Mr Ilett said Lat27’s work on the Mon Repos Turtle Centre near Bundaberg would also encourage greater visitation and enhance community involvement within this critical research and educational facility at the edge of the renowned World Heritage listed Great Barrier Reef.

“There are some very interesting challenges in designing outdoor activity spaces in areas of such environmental significance, but it is extremely rewarding work, particularly when you see such a positive public response,” he said.

www.npsr.qld.gov.au

For copies of the master plans go to http://nprsr.qld.gov.au/managing/plans-strategies/gateway-visitor-centre-master-plans.html

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New tunnel system to flood proof Sydney’s newest town centre

TUNNELLING has started in Sydney on the first major flood prevention project since torrential rains devastated parts of Sydney and the Hunter Valley in April. The work will flood proof the Green Square Town Centre, the first new town centre built in central Sydney for more than a century.

A 2.4km-long underground drain, big enough to empty 300 bathtubs a second, is designed to dissipate flash floodwaters, like those that trapped drivers just 4km from Sydney Town Hall. 

Two months after rescuers in Zetland waded through chest deep waters to pull people from submerged vehicles, the City of Sydney and Sydney Water has started tunnelling on the biggest drain built in the city for decades.

Underground tunnelling machines will excavate the drain that will carry up to 30,000 litres of stormwater per second to Alexandra Canal.

The tunnel will take floodwaters away from Green Square – one of the fastest growing residential areas in NSW – and allow safe construction of the Green Square Town Centre.

Green Square Town Centre is located on what is known as the Waterloo Swamp flood plain between the city and Sydney's Kingsford Smith Airport, where heavy rain can cause hazardous flooding sometimes more than 2m deep.

Lord Mayor Clover Moore said the City had worked closely with Sydney Water on this vital project to transform Green Square, making it even more attractive to developers.

“The torrential storms in April were a graphic reminder of how vital this trunk drain is to make this area a great place for thousands of people to live and work safely,” Lord Mayor Moore said.

“This area was once Sydney’s industrial heartland, but now a lot of the industry has left and new jobs and residents are moving in and making this our fastest growing village,” Ms Moore said.

“At a cost of more than $90 million, this project is a key component of the City’s $440 million transformation plan for new infrastructure and community facilities to ensure the Green Square neighbourhood is a great place to live, work and enjoy.”

Developers building the Green Square Town Centre praised the City and Sydney Water for constructing the drain they said would transform one of the fastest growing residential areas in the state.

Ms Moore said tunnelling machines are traditionally given a woman’s name and the Green Square machine has been named ‘Mary Veronica’ in recognition of Mary Veronica Neilson. Mrs Neilson was the area’s first female alderman (1945–1948) and first female Mayor (1946 and 1947) when she served on Waterloo Municipal Council.

Mrs Nelson’s granddaughter, Janine Loyzaga, said her grandmother had worked hard to improve the community and would have been honoured to be part of this project.

“Mary Veronica was a woman of strong views and strong opinions, and a leader in community service in a time when it was still unusual for a woman to be any of those things. She would have been proud and appreciative to have her contributions to her community recognised,” Mrs Loyzaga said.

The tunnelling machine was be lowered into concrete-lined launch pits in late June, from where it began working below the water table, digging through Botany sands.

Controlled by computers above ground, the micro tunnelling machine will travel about 12-15m a day digging a hole 2.15m in diameter which is lined with concrete pipes.

Up to three micro tunnelling machines will be used together and in some areas three tunnels will be placed side by side to cope with huge volumes of water. Tunnelling is due to finish by the end of 2017.

To minimise disruption to traffic and the community, the tunnelling machines will work well below the surface avoiding the need to dig-up roads as is often required when laying stormwater pipes.

The stormwater drain will significantly reduce flooding in and around the Green Square area and particularly at Joynton Avenue and on Botany Rd, Zetland.

Much of the route from Link Rd to Alexandra Canal runs through or under property owned by the City. The route was chosen to minimise the impact on residents, businesses and the environment.

The Green Square Stormwater Drain Project is being delivered by the DG Alliance, a team consisting of Sydney Water, the City of Sydney, UGL Engineering, Seymour Whyte Constructions, Parsons Brinckerhoff Australia and RPS Manidis Roberts.

www.cityofsydney.nsw.gov.au

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Booming Providence development brings forward $5m civil construction contract

BMD URBAN has been awarded early the contract for civil construction works on 144 new lots at Providence in Ripley Valley, South East Queensland, because of a surge in demand.

Providence is now one of the fastest selling developments in the country and the contract value of almost $5 million includes regional trunk infrastructure such as roads, water and sewer mains.

BMD was awarded the tender by Providence developer Amex Corporation, bringing through the largest residential community being developed in the fast growing Ripley Valley near Ipswich.

Providence project director Michael Khan said construction was ahead of schedule because of much higher than expected consumer demand. 

“Over the first six months of sales we’ve been selling more than one block of land every day to a mixture of first home buyers, empty nesters, investors and builders who can see the value of buying early into Providence,” Mr Khan said.

Civil works construction on the first three stages are nearing completion. The bulk earthworks on stages 4-6 are also finished.  This brings the total to 338 lots at varying stages of construction at present.

Mr Khan said civil works on stages 4-6 would include sewerage, stormwater, water mains and roadworks across three new stages for more residents to begin building later this year.  In addition to these works, there will also be services such as electricity, NBN fibre to the home, natural gas and landscaping.

Construction on Providence is several months ahead of schedule, and is quickly transforming the former grazing land into a new master-planned community, which will eventually house up to 20,000 people.

Providence is the largest single development within Ripley Valley. The 670-hectare master-planned community will be developed over the next 20 years and include two future primary and two secondary schools, a health and wellbeing precinct and 200 hectares of retained bushland and landscaped open space.

Over the next 25 years, the entire Ripley Valley is projected to accommodate 10 percent of South East Queensland’s population growth, with a projected population of 120,000 people and significant employment opportunities for the western corridor.

WATER PARK IN PLAY

Amex Corporation lifted the appeal of the development with last month’s surprise announcement of a new water play park for the Ripley Valley region at Providence. It is scheduled to be open to the public for next summer.

Ripley Valley’s first water play park will feature a dedicated toddler water playground, an older children’s zone, and space for adults. Combined with the adjoining Adventure Play area, the new destination will be known as Providence Splash n Play.

“We’ve designed the Splash n Play water play park with fun-loving families in mind,” Mr Khan said.

“There’s the toddler area with ‘wiggly’ sprayers that little tots can control, and the bigger kids zone with 4m-high water features that shoot water down to the ground. There’s even ‘day beds’ where mums and dads can relax on the large seating platforms watching their children play.

“As the largest development within Ripley Valley, Providence is creating hectares of active recreational spaces for the community,” he said. 

““The Splash n Play water play park, the neighbouring Adventure Park and bikeways will cement Providence’s position as the community heartland for families living in the Ripley Valley.”

About 80 percent of the Splash n Play water play area is to becovered in shade structures, making it a sunsafe place to enjoy the summer, Mr Khan said. “As well as shade structures, the park is dotted with palm trees, creating a cool oasis on hot summer days.”

Commencing near the District Park that has the Splash n Play area and the Adventure Play, there will be a network of bicycle paths criss-crossing the development, enabling residents to make their way to this destination without having to drive the car.

Splash n Play forms part of the 200 hectares of retained bushland and landscaped open space at Providence, which will eventually be home for up to 20,000 people.

Amex Corporation is an Australian family-owned residential development company that has been operating in Queensland for 25 years, and has delivered 14 communities across Australia.

www.providenceripley.com.au

www.amexcorp.com.au

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