Property

Property: Chinese investors rack-up $120m spend on land since July

Beef Central, 28/09/2015

CHINESE investors have spent $120 million since the new financial year started buying rural property across Australia and the signs are that the buying spree is only the beginning, with more than $1 billion worth of deals in play, according to the Australian Financial Review.

After a disappointing foray into Australia’s resources sector Chinese investors have taken a far more cautious approach to agriculture but are now finally starting to act, buying a $40 million farm every fortnight, on average, for the past two months.

cattle-work-northern-genericChinese groups were identified as far back as 2012 as the next major group of foreign investors for rural Australia, but aside from Shandong Ruyi buying Australia’s largest cotton irrigator Cubbie Station for $232 million, it took three years to see a serious buying spree by the Chinese, the AFR review said in this article published this morning.

Dashang Group, Hailiang Group, Fucheng Group, Tianma Bearings Group and New Hope have outlaid about $260m since March on rural holdings and production.

There are more Chinese investors waiting at the farm gate, the AFR says. They include one of China’s largest beef producers, Chongqing Hondo Agriculture Group, which is looking to buy up to $100 million worth of cattle stations in Australia.

Others include Pengxin’s listed subsidiary, Dakang Farming, along with Shanghai CRED, financial services group Zendai and textile, property and logistics conglomerate Shanshan Group who are all said to have shown interest in Australia’s largest land holder S. Kidman & Co or the Terra Firma backed Consolidated Pastoral Co.

Austrade’s trade commissioner in Chengdu, Jeff Turner, said in May that the line-up of Chinese interests was extensive, with as many as 300 Chinese cattle and cattle-related companies looking to invest in Australia.

However it is the comments of Chinese buyers that have fuelled the hopes of farm vendors, agents, bankers and lawyers all looking to do deals with the Chinese giants, he told AFR.

The chairman of New Hope Group, Liu Yonghao, who has pledged to invest $500m in Australian agriculture over the next three years, said China’s land was seriously overloaded, with too much fertiliser degrading the land.

“Australia has a vast landmass, good grasslands and sunshine,” he said. “It is our hope to bring Australia’s beef and mutton into the market of China. We should say these investments are beneficial to Australia and China.”

With the recent increase in Chinese investment, local law firms who have represented Chinese buyers say such investors are now making fewer mistakes.

“Early investors who came in made substantial losses as a result of their inexperience,” Holding Redlich partner Brian Healey told the AFR.

“They are much more savvy than they were three or even two years ago. They study our social, legal and political systems very carefully.”

 

Click here to view the full AFR article

 

 

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