Hong Kong developer Far East Consortium focuses on Australia, Singapore and UK markets
Chairman David Chiu Tak-cheong says land prices are too high in Hong Kong and the mainland – but he’s certainly not turning his back on either markets
Faced with rising competition at home, Hong Kong developer Far East Consortium International has accelerated its investment in Australia and the United Kingdom, says chairman David Chiu Tak-cheong, who sees a diversified international strategy as key to the business’s long-term success.
“I am optimistic about Australia. The country has relatively soft immigration policies and we have seen a sharp increase in Chinese buying properties there,” said Chiu.
The company’s landmark West Side Place project in Melbourne’s largest CBD residential development sold more than half its units within three weeks of the first batch being launched in June.
The developer has been investing in the city for more than 20 years and is expanding its footprint in the rest of the country too, including in Sydney, Brisbane, the Gold Coast and Perth.
In August, Far East landed the contract to own a key section of the Western Australia Government’s Perth City Link urban renewal project, and local media reported it plans to spend A$219 million (US$166.8m) building apartments and a hotel in the area.
“The entire Australian market is very important to us, given its two per cent annual growth in population,” added Chris Hoong, the company’s managing director.
A veteran developer with international business experience also spanning Malaysia, Singapore, the UK and New Zealand, Chiu said he has no plans to give up on the Hong Kong or mainland markets, but isn’t interested in chasing expensive land in the markets right now, with competition so fierce.
He said real estate is a cyclical industry, and the company’s geographical diversification gives it the flexibility to choose its timing to add to its land resources.
The developer is currently also seeking opportunities in the UK and Singapore, where some areas are still undervalued.
Despite the Brexit shock, Far East made its latest foray into the UK last month, being picked as the developer for a prime residential site near Manchester’s Victoria Station as a part of the region’s regeneration project.
The project will deliver more than 600 new homes and new public amenities around the historic Angel Meadow Park.
“London and Manchester are still under-supplied markets, even after Brexit – but not many people realise that,” said Chiu.
“Brexit provided us with the perfect timing to enter that market, as land prices have been too high in the past.”
He thinks local UK developers also lack the capability to increase much-needed property stocks, and many municipal authorities there are welcoming foreign developers to fill the gap.
Earlier in the year, the company obtained approval from the London Mayor’s office to build a £500 million residential scheme, Alpha Square near Canary Wharf, consisting of three towers including 400 flats, a hotel and a new school. The project is expected to complete in 2019.
Although he says many mainland Chinese developers have rushing into overseas markets as the yuan dropped in value, increasing competition for prime spots in cities such as Sydney and London, he’s unconcerned about missing out, thanks to its strong overseas reputation.
The developer, he added, has a solid track record in both countries, having worked on several mixed-use projects with various local authorities, involving mainly residential developments and hotels.
“Getting land from local governments will continue to be our priority, as it is less risky and the cost is much cheaper,” Chiu said.