Not far from city’s heart, another CBD seen as hot prop­erty

China Daily (Canada) - - PEOPLE - By KARL WIL­SON karl­wil­son@chi­nadai­lya­

De­pend­ing on who you talk to, Aus­tralia’s prop­erty mar­ket is so over­val­ued it is only a mat­ter of time be­fore the bub­ble bursts and the whole lot comes tum­bling down.

Liu Hao dis­agrees: “I do not think (the mar­ket) is as bad as some are say­ing.”

The 34-year-old ex­ec­u­tive di­rec­tor of prop­erty de­vel­oper Star­ry­land Aus­tralia is buoy­ant about real es­tate Down Un­der.

Born in Wuhan, cap­i­tal of Hubei prov­ince, where his fa­ther worked as a small de­vel­oper, Liu got his de­gree at Brad­ford Uni­ver­sity in the United King­dom.

De­spite the doom and gloom in the me­dia, de­vel­op­ers have not given up. There is no shortage of in­vestors es­pe­cially from Asia want­ing to buy into the Aus­tralian prop­erty mar­ket, de­spite Aus­tralian banks cut­ting credit to for­eign bor­row­ers.

None of this has been lost on de­vel­op­ers, es­pe­cially those from Sin­ga­pore, Malaysia and, in par­tic­u­lar, China who have spent more than A$1.1 bil­lion ($802 mil­lion) on prop­er­ties in Syd­ney, Melbourne, Bris­bane, the Gold Coast and Perth over the past three years.

They still see Aus­tralia as a good place to con­duct prop­erty trans­ac­tions, cit­ing the coun­try’s ease of do­ing busi­ness, stable econ­omy and po­lit­i­cal sys­tem.

Among the Chi­nese de­vel­op­ers mak­ing their mark Down Un­der are Green­land Group, China Poly Group, Coun­try Gar­den and, of course, Star­ry­land, the Aus­tralian arm of Wuhan-based Fux­ing Huiyu Real Es­tate.

Liu said a lot of com­par­isons are made be­tween Syd­ney and Melbourne but the two mar­kets are very dif­fer­ent.

“In Melbourne there is prob­a­bly an over­sup­ply of flats, es­pe­cially around the South­bank area. But in Syd­ney that is not the case.”

The A$550 mil­lion devel­op­ment on the banks of Syd­ney’s Par­ra­matta River, set amid lush park­land, is the com­pany’s first ven­ture in Aus­tralia. It has gained a great deal of pub­lic­ity since it be­gan in 2014.

The devel­op­ment is just 1.2 kilo­me­ters from the heart of Syd­ney’s sec­ond cen­tral busi­ness district, Par­ra­matta.

It has be­come the show­case for the com­pany. Par­ra­matta is un­der­go­ing a ma­jor facelift to ac­com­mo­date com­pa­nies re­lo­cat­ing from Syd­ney’s over­crowded CBD.

“We chose Par­ra­matta be­cause of its cos­mopoli­tan cen­ter, good trans­port links and its huge growth po­ten­tial.” The first phase units of the 773 apart­ment devel­op­ment sold out when they went on the mar­ket two years ago, with the sec­ond and third phases go­ing much the same way.

“(Aus­tralia’s prop­erty mar­ket) may have been over­heated a few years ago. But I think it has come off the boil,” he said.

“All those cranes you see dot­ting the sky­line around Syd­ney are build­ing prop­er­ties that have al­ready been sold.”

Liu added that the rule of the game in Aus­tralia is to pre­sell at least 70 per­cent of the to­tal devel­op­ment be­fore the banks will lend any money.

“The prob­lem with Syd­ney is that it is hard to find large suit­able sites close to the city … you have to go a fair way out from the CBD.”

Liu’s path to the heady world of high-end prop­erty devel­op­ment amid the glam­our of Syd­ney came via a cir­cuitous route.

Af­ter grad­u­at­ing, Liu worked at TK Maxx, a dis­count re­tail chain in Brad­ford. He then moved back to China where he worked for a de­vel­oper in Wuhan and mar­ried some­one he had known since pri­mary school.

“It was my wife who con­vinced me to move to Aus­tralia,” he said. “She said the cli­mate was good, the peo­ple were friendly and it was a good place to bring up kids.”

Liu first moved to Melbourne where he worked as a project man­ager for a builder. He joined Star­ry­land in 2013 as ex­ec­u­tive di­rec­tor, and be­came re­spon­si­ble for man­ag­ing the ac­qui­si­tion, fi­nanc­ing and devel­op­ment of res­i­den­tial projects.

“I guess we are dif­fer­ent to many de­vel­op­ers,” he said. “We are not just build­ing apart­ments, we are build­ing and de­vel­op­ing homes for peo­ple to live in and raise fam­i­lies.

“When we pick a site we look for three things: Is the site near pub­lic trans­port? Does it have easy ac­cess to shop­ping? And is it close to schools and uni­ver­si­ties?

“For us, Par­ra­matta ticked all those boxes.” How­ever, it was not all smooth sail­ing for Star­ry­land when it started in Aus­tralia in April 2014.

“I think one of the main is­sues not only for us but any Chi­nese de­vel­oper set­ting up in Aus­tralia is un­der­stand­ing the cul­tural dif­fer­ences be­tween the two coun­tries and how those dif­fer­ences can be over­come.

“Reg­u­la­tions are dif­fer­ent be­tween states in Aus­tralia and sales strate­gies and mar­ket­ing have to be adapted to the lo­cal en­vi­ron­ment. But it is the cul­tural dif­fer­ences that pose the big­gest chal­lenges.”

Liu made a point of hir­ing staff who un­der­stood the Chi­nese par­ent com­pany’s cul­ture while at the same time hav­ing a good un­der­stand­ing of Aus­tralian in­dus­try.

He cred­its Star­ry­land’s suc­cess to hav­ing the “right team” and “good com­mu­ni­ca­tions with our par­ent com­pany back in China”.

“The fact there is only a few hours’ time dif­fer­ence be­tween us and our par­ent com­pany is a great ad­van­tage. But first and fore­most we pride our­selves on be­ing a good lo­cal com­pany.”

Star­ry­land is proud of its build­ings and en­sures qual­ity through us­ing the best con­trac­tors, Liu said.

“We have man­aged to build a suc­cess­ful team. How we work with lo­cal sup­pli­ers, how we re­spect the in­dus­try and the mar­ket, how much ef­fort we are putting into build­ing the com­pany I am proud of that.”

Star­ry­land in­tends to be in Aus­tralia for the long haul.

“We have no in­ten­tion of leav­ing. We are quite op­ti­mistic about the fu­ture.

“When you look at the pro­jec­tions for pop­u­la­tion growth, es­pe­cially along the eastern se­aboard, you also see a de­mand for prop­erty whether it be apart­ments or houses.”

Liu added that Syd­ney, Melbourne and Bris­bane are ex­pand­ing to meet growth, and the prop­erty de­vel­oper aims to be in­volved. “Be­sides that, our par­ent com­pany sees Aus­tralia as an im­por­tant step in build­ing a global pro­file.”

The Aus­tralian prop­erty mar­ket may be com­ing off the boil, but the value of res­i­den­tial con­struc­tion projects that be­gan in Syd­ney in the 2015-16 fi­nan­cial year (July 1 to June 30) was A$23.7 bil­lion, ac­cord­ing to anal­y­sis by prop­erty agent PRD­na­tion­wide. This fig­ure is more than triple the pre­vi­ous year’s A$7.7 bil­lion.

But it was Par­ra­matta that out­stripped all other sub­urbs in Syd­ney with projects to­talling more than A$1 bil­lion.

An­a­lysts say the rea­son for Par­ra­matta’s build­ing boom is its de­mo­graphic pro­file. The pop­u­la­tion today is younger, em­ployed in while-col­lar pro­fes­sions and earns more than peo­ple who lived in the area a decade ago.

Of­ten re­ferred to as the gate­way to Western Syd­ney, it is here that much of the city’s growth will take shape over the com­ing decades.

“As Par­ra­matta grows, I would like to think we helped play some part in that growth,” Liu said.

“For me, the great sat­is­fac­tion is know­ing we have built good, qual­ity homes for peo­ple. And as a de­vel­oper I do not think you can ask more than that.”

For me, the great sat­is­fac­tion is know­ing we have built good, qual­ity homes for peo­ple. And as a de­vel­oper I do not think you can ask more than that.”

ex­ec­u­tive di­rec­tor of prop­erty de­vel­oper Star­ry­land Aus­tralia

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