Australian firm eyes Chinese investors for property trust
Australian firm with Shanghai-based partner seeks Chinese funds to invest in commercial property development projects down under, real estate trust
An Australian firm hopes to exploit the growing interest in offshore property investments among wealthy mainland Chinese by offering them an opportunity to invest in its privately-run real estate trust.
"It is the first time we are looking for mainland investors in our project," said Phillip Nyssen, director and founder of Property Joint Ventures, a private business that pools investors into trusts that invest in commercial property projects in Australia.
Nyssen, who is based in Shanghai, said he had formed a partnership with Shanghai Xuan Hao Investment Management, a Shanghai-based firm.
"We see an increasing trend for wealthy mainland Chinese to purchase properties overseas and we are providing boutique-scaled inner-city properties as a niche offering," he said.
Rising numbers of mainland Chinese investors have sought offshore properties since the central government introduced a series of measures aimed at cooling the domestic property market, such as tighter lending regulations and restrictions on the number of properties that may be bought.
Nyssen said the trusts would provide access to commercial development opportunities that are readily approved by the Australian Foreign Investment Review Board. Under the business model, each trust will have fewer than 10 investors, and will hold one project. The target investment is A$1 million (HK$7.5 million) per investor.
Nyssen's latest project is a serviced apartment development within three kilometres of the central business district of Brisbane. Nyssen said it would take two to two-and-a-half years from acquiring the site to handing it over to the leasing management firm, Quest.
"This timeframe includes the development approval, finance establishment, construction, and registration of all titles and transfer to syndicate investors," Nyssen said.
While investors would ideally hold the property for five to six years to minimise the goods and services tax and taxation liabilities, Nyssen said investors could consider their first exit two- and-a-half years after their investments. They can take back 20 per cent of their investments upon the property's completion.
Property Joint Ventures and its partner developer Pikos will identify a development site, consider its best use, conduct due diligence and complete all analysis, documentation and agreements required to interest investors.