China’s Greenland Group plans billion dollar investment in Australia
5 February 2014
Shanghai-based Greenland Holdings Group recently launched a property project worth over $600 million in Sydney, its first in Australia. This is part of a $1 billion expansion into the country, and includes a development near the Flemington Race Course in Melbourne with more expected to follow.
The Greenland Centre, which includes a high-end boutique hotel and a residential tower in Sydney’s Central Business District, will be constructed on the heritage-listed former Sydney Water Board site. The property was acquired from Canada’s Brookfield Asset Management for about $100 million. The project is expected to be completed in late 2017.
Chairman Zhang Yuliang told the Australian Financial Review (AFR) that the group would have new property projects in Australia within the next 12 months.
‘We hope to open one hotel in each of the influential cities (in Australia),’ Mr Zhang told the newspaper. ‘If the project is big enough in scale, we will have a hotel with the project.’
The company, which owns a casino in South Korea, has also expressed ¬interest in bidding for a casino license in Queensland.
The Greenland Group’s hotel business covers 35 cities in China alone, with more than 60 hotels and over $3.75 billion (RMB20 billion) in assets. The company owns two hotel brands –“Primus”, the boutique brand, and the business hotel brand “The Qube”. Last year, it launched a 177-room Qube Hotel in Frankfurt in conjunction with its Spanish partner, Meliá Hotels International.
Greenland is one of the largest Chinese property investors in the US and has recently announced plans to invest in the UK. The company’s global expansion has been attributed to the rising number of Chinese visitors including businesses, tourists, residents and students.
‘There are 100 million Chinese tourists around the world and this will become 200 million in the next couple of years,’ Mr Zhang told the AFR.
China’s high net worth individuals are also increasingly looking for assets overseas for investment and risk diversification according to Bain & Company’s China Private Wealth Report 2013.
Austrade’s Shanghai-based Senior Trade Commissioner, Michael Clifton attributed the increasing Chinese investment in tourism infrastructure to growing visitor numbers.
‘The Chinese tourism boom combined with a tightening supply of accommodation in Australia has increased opportunities for Chinese investors in Australian hotels and other aspects of the nation’s tourism infrastructure,’ he said in a previous update.
Other Chinese players have followed, with the Hong Kong-based Fu Wah International Group purchasing Melbourne’s landmark Park Hyatt Hotel for over $130 million. The company is also looking to invest in other capital cities.
The Greenland Holdings Group is a Chinese state-owned enterprise covering real estate, energy, finance, construction, and automobile businesses. It is a Fortune Global 500 company, ranking at 359 in the 2013 list.