Harry Triguboff wild about a $15bn deal on Meriton
THE AUSTRALIAN JANUARY 27, 2015 12:00AM
Lisa Allen
Property & Tourism Reporter
Sydney
Meriton Group Founder and Billionaire Harry Triguboff Interview
‘I am a dictator, I am not a board member,’ Harry Triguboff said in an interview with The Australian. Picture: Bloomberg Source: Supplied
HARRY Triguboff has set the price tag for his Meriton residential apartment business at a hefty $15 billion, revealing that once he sells the company he expects to branch out into water infrastructure.
“If I sell Meriton, I could get $12 billion to $15 billion easy,” Mr Triguboff told The Australian.
“If I sold Meriton — and I am only 81, thank God — I would like to get involved in water.”
Mr Triguboff wants Australia’s arid lands populated and has long supported water infrastructure projects in Israel, such as the development of reservoirs.
At home, the nation’s most prolific apartment developer has a $1bn project in Sydney’s Mascot on his hands this year and a $1.5bn development in Sydney’s Pagewood next year.
All up, he expects to build 3000 apartments in this year on the eastern seaboard and up to 5000 next year — provided he can get development approvals.
Despite Mr Triguboff’s $15bn asking price, a recent external valuation by Grant Samuel claimed Meriton was worth up to $10bn if recurring income was taken into account.
Meriton also revealed for the first time in its history that its net assets rose 21 per cent to $7.4bn last year and annual turnover jumped more than 50 per cent to $2bn in the past year. It jumped from 29th place on IbisWorld’s Top 500 to 11th place last year.
“I am learning about the (sale) process. To sell that type of business (Meriton) is a long process,” Mr Triguboff said, adding there were a couple of parties looking at the business, but no serious takers as yet. Chinese developer Country Garden, which has established a strong presence in Sydney, has signalled its interest.
In a wide-ranging interview, Mr Triguboff also called for interest rates to be lowered, but said he did not sit on company boards like his peer Frank Lowy, who sat on the Reserve Bank board from 1995 to 2005.
“I am a dictator, I am not a board member,” he said.
“I can’t go on a board. I am happy to advise, on the other hand.”
He said he did not like boards because they were “inefficient and take too long. I like speed.”
Meriton is this year building its largest project to date — the $1bn Mascot Central fronting 19-33 Kent Road, Mascot, in Sydney’s south.
The development will comprise 800 apartments and 386 serviced apartments, plus 16 shops, a Woolworths and a childcare centre.
Next year, the company will concentrate on the development at Pagewood comprising about 470 apartments and a childcare centre fronting 200 Coward Street.
Mr Triguboff said he would not allow a part sale or a carve-up of the business after sources suggested that he might sell the serviced apartment division.
Chinese ramp up property buying sprees
Samantha Hutchinson and Mercedes Ruehl
833 words
19 Jan 2015
The Australian Financial Review
AFNR
English
Copyright 2015. Fairfax Media Management Pty Limited.
A former rice grower and a People's Liberation Army revolutionary are among the new wave of Chinese developers fuelling a boom in apartment construction.
China's largest developers have a starting pipeline of apartments valued at more than $4 billion on the east coast, and are responsible for more than $2.1 billion in development site deals in the past 18 months.
Their size means they can afford to pay huge prices for some of the best sites – and they're just getting started.
"Most of the biggest domestic developers look tiny when compared with these [international] conglomerates," said CBRE Australia chief executive Tom Southern. "People don't understand the scale of what they do globally."
Mr Southern said Chinese developers stand out, not so much for the amount of money they spend, but because they buy high-profile real estate and so little is known about their origins.
Global property group Knight Frank said the pace of Chinese investment has picked up rapidly. "What first started as sovereign funds making exploratory investments has proliferated into buying sprees," Knight Frank research director David Ji observed in the group's China Outward Real Estate Investment report.
Many of the identities helming these development groups, such as billionaires Wang Jianlin, Xu Jiayin and China's richest woman Yang Huiyan, were virtually unknown in Australia 18 months ago.The magnates
In China, Dalian Wanda founder and chief executive Wang Jianlin is recognised as China's second-richest man and known for his close Communist Party connections. But the group has only made the headlines here recently as a result of its interest in landmark Sydney development site Gold Fields House at Circular Quay, and its $500 million stake in the Jewel apartment complex on the Gold Coast.
The magnate served in the PLA for 16 years before joining an struggling developer in 1990 and rebranding it as Dalian Wanda. The company has total assets above $US62 billion ($75 billion).
Rice grower and bricklayer Yang Guoqiang grew a formidable Chinese property empire known as Country Garden, buying empty lots in the Guandong province from 1997 onwards.
The group made its first Australian purchase in North Ryde in 2014 for $73 million. Now controlled by his daughter Yang Huiyan, the group has assets of more $34.7 billion. "There is a continued drive to move investment and development capital out of China and around the globe. A lot of these groups have been active in the US and UK and now Australia has become another area for them to consider," CBRE's Mr Southern said.
Locally, Chinese developers are expected to spend more than $44 billion on development sites and projects during the next seven years, according to Credit Suisse analysts.
"I think there will be great increase in the amount of investment from Chinese companies in the coming years, and not just on property, but every other sector," Greenland local director Kang Xue told The Australian Financial Review.Highly diversified
And unlike large local developers, which tend to focus solely on property, many of China's new wave are conglomerates with highly diversified businesses.
China's largest conglomerate Fosun started as a market research company in 1992 founded by Fudan University graduate Guo Guangchang and three university friends.
The Shanghai-based group, on track to become the Berkshire Hathaway of China, uses insurance revenues to fund operations in industries from pharmaceuticals to mining and property. Fosun splashed out $US725 million on New York's One Chase Manhattan Plaza. It is also in the midst of developing a landmark development on Shanghai's famous Bund. It is now circling assets in Sydney and has set a target to boost the share of overseas real estate to 50 per cent of its portfolio from 21 per cent.
Mr Southern said these big companies will not stop at one development. "They usually do several more if they see the right opportunities," he said.
Chinese developers are drawn to Australia for its stable regulatory environment, buoyant housing demand and strong prospects for migration.
But Australia is just one in a string of international destinations, Greenland's Mr Xue said. "Our overseas strategy started in 2012, and since then we've established not just in Australia, but in over 30 countries," he said.
"The central government in China has a 'go-out' policy at the moment, and from the national level it encourages you to invest overseas and outside the borders of China."
During 2014, Chinese insurer Anbang Insurance Group paid $US1.95 billion for 1413-room New York's Waldorf Astoria hotel. In the same year, Chinese officer landlord Soho China partnered with Brazilian bank Moise Safra to grab a 40 per cent stake in the GM Tower for $US700 million.
Key points Developers notable for big spending and low profiles. More than $44b expected to be spent on development sites and projects during the next seven years.
Fairfax Media Management Pty Limited
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Levies on foreigners will hurt the locals, says Property Council
THE AUSTRALIAN JANUARY 29, 2015 12:00AM
Lisa Allen
Property & Tourism Reporter
Sydney
THE Property Council of Australia says extra fees and stamp duties on foreign buyers will dampen residential approvals and starts from their high levels.
Executive director Nick Proud said calls for taxes on buyers amid claims foreigners are pricing Australians out of the home market would hurt the nation’s residential building sector, which at present has the highest number of homes under construction on record.
Bank of America Merrill Lynch’s Saul Eslake said there was an unknown level of foreign buying, while an ANZ and Property Council of Australia survey found about a fifth of developers in NSW who responded sell the bulk of apartments to foreigners.
Industry veterans such as Bill Moss, a former head of Macquarie Group’s property arm, have previously called for added imposts on foreign buyers.
He said state governments could levy an extra 5 per cent stamp duty on foreign buyers, claiming that Australian buyers could be priced out of some markets. However, Mr Proud said extra taxes were “unnecessary and potentially damaging, with harmful flow-through consequences on Australian homebuyers, prices, supply and jobs”.
“Such a move would significantly dampen residential dwelling approvals and starts from present high levels,” he said.
He said the council supported the government’s “measured and consultative approach” to strengthening the foreign investment framework.
“The last thing we want to see as an industry is misinformed foreign investment or noncompliance by a handful of foreign developers jeopardising continued strong foreign investment by the majority or sparking a regulatory backlash,” Mr Proud said.
“The Foreign Investment Review Board rules as strengthened by the recommendations of the foreign investment in residential real estate review … need to be implemented. Foreign investment is an essential ingredient for boosting supply in the domestic residential market.”
Happy CNY everyone.
25-02-2015 12:10:38
UPDATE 1-Australia plans to charge fees to foreigners buying real estate
(Recasts, adds real estate comments) By Byron Kaye SYDNEY, Feb 25 (Reuters) - Australia plans to charge fees to foreign nationals buying residential property and fine those who break foreign investment laws in an attempt to cool one of the world's hottest property markets, but experts doubt it will make housing more affordable.
Treasurer Joe Hockey said on Tuesday he hopes to raise about A$200 million ($157 million) a year by charging foreign home-buyers A$5,000 for properties valued under A$1 million and an another A$10,000 for every additional A$1 million.
The government will also set up a register of foreign nationals buying real estate and fine those who break the law up to a quarter of the value of the property and force them to sell, Hockey added.
While Hockey didn't specify any nationality being targeted, the new rules come as Australia experiences a rapid influx of Chinese money - both legitimate and illegitimate - into its property market. [ID:nL4N0QK72I] Australia's foreign investment review board says China was the No.1 source of foreign capital investment in real estate in 2013, approving nearly A$6 billion ($5.58 billion) of investment, up 41 percent from a year ago.
The country's two biggest cities Sydney and Melbourne, home to a third of the country's 23.6 million population, rank third and sixth in the world's least affordable places to buy a home, according to U.S. urban planning researcher Demographia.
Home prices in Sydney rose more than 13 percent in the year to October, prompting media reports of foreigners snapping up properties. Regulators have also called for banks to limit riskier loans and there have been calls for tax loopholes which benefit investment properties to be closed. [ID:nL3N0TT2J0] "We don't have a major concern that foreign investors are major contributors to affordability (problems), but perceptions out there are created when there is a lack of data and information about what's actually happening," said RP Data Executive General Manager, Executive, Craig McKenzie.
Real Estate Institute of Australia Chief Executive Officer Amanda Lynch said the new fees were too high and will not benefit Australians buying properties under A$1 million. She said the United States and Canada had no comparable fee and Singapore's was lower "(Foreign investors) are not really competing with first home buyers," she said. "It will help Australian property buyers in Sydney or Melbourne to get property at the higher end of the market, but the rest of the market won't notice a substantial difference." Garo Karamanian, a real estate agent in the popular Sydney Chinese real estate suburb Chatswood, supported the fees and fines, saying they will curb large developers' ability to inflate prices for off-the-plan sales to foreigners.
"It will slow down the market probably but it will stop the developers loading the prices knowing they can just flog them overseas," he said.
Justin Brown, chairman of residential projects at real estate agency giant CBRE Group Inc , said the new fees amounted to taxes, were "counterproductive and ill thought", and could lead to a market correction.
https://sg.uobkayhian.com/page/SLQG_News...D=23135615
(25-02-2015, 01:23 PM)kbl Wrote: [ -> ]Happy CNY everyone.
25-02-2015 12:10:38
UPDATE 1-Australia plans to charge fees to foreigners buying real estate
(Recasts, adds real estate comments) By Byron Kaye SYDNEY, Feb 25 (Reuters) - Australia plans to charge fees to foreign nationals buying residential property and fine those who break foreign investment laws in an attempt to cool one of the world's hottest property markets, but experts doubt it will make housing more affordable.
Treasurer Joe Hockey said on Tuesday he hopes to raise about A$200 million ($157 million) a year by charging foreign home-buyers A$5,000 for properties valued under A$1 million and an another A$10,000 for every additional A$1 million.
The government will also set up a register of foreign nationals buying real estate and fine those who break the law up to a quarter of the value of the property and force them to sell, Hockey added.
While Hockey didn't specify any nationality being targeted, the new rules come as Australia experiences a rapid influx of Chinese money - both legitimate and illegitimate - into its property market. [ID:nL4N0QK72I] Australia's foreign investment review board says China was the No.1 source of foreign capital investment in real estate in 2013, approving nearly A$6 billion ($5.58 billion) of investment, up 41 percent from a year ago.
The country's two biggest cities Sydney and Melbourne, home to a third of the country's 23.6 million population, rank third and sixth in the world's least affordable places to buy a home, according to U.S. urban planning researcher Demographia.
Home prices in Sydney rose more than 13 percent in the year to October, prompting media reports of foreigners snapping up properties. Regulators have also called for banks to limit riskier loans and there have been calls for tax loopholes which benefit investment properties to be closed. [ID:nL3N0TT2J0] "We don't have a major concern that foreign investors are major contributors to affordability (problems), but perceptions out there are created when there is a lack of data and information about what's actually happening," said RP Data Executive General Manager, Executive, Craig McKenzie.
Real Estate Institute of Australia Chief Executive Officer Amanda Lynch said the new fees were too high and will not benefit Australians buying properties under A$1 million. She said the United States and Canada had no comparable fee and Singapore's was lower "(Foreign investors) are not really competing with first home buyers," she said. "It will help Australian property buyers in Sydney or Melbourne to get property at the higher end of the market, but the rest of the market won't notice a substantial difference." Garo Karamanian, a real estate agent in the popular Sydney Chinese real estate suburb Chatswood, supported the fees and fines, saying they will curb large developers' ability to inflate prices for off-the-plan sales to foreigners.
"It will slow down the market probably but it will stop the developers loading the prices knowing they can just flog them overseas," he said.
Justin Brown, chairman of residential projects at real estate agency giant CBRE Group Inc , said the new fees amounted to taxes, were "counterproductive and ill thought", and could lead to a market correction.
https://sg.uobkayhian.com/page/SLQG_News...D=23135615
bopian liao, have to do something otherwise kena voted out by the people very quickly like those ministers in Melbourne and Brisbane..
looks like the "hot air" will be translated into some actions this time round.
Price reaction should be very interesting. Those that are flouting the rules must be calling their agents to sell now rather than get fined the 1/4 of house price and force sell.
Jail threat for developers who market all their apartments offshore
Developers who market Australian apartment blocks solely offshore could face up to two years in prison, under new Federal Government proposals to deal with foreign investment.
The prison time component is buried in the fine print of the Strengthening Australia's Foreign Investment Framework Options Paper, which - as Domain reported on Wednesday - would see foreign buyers paying at least $5000 every time they apply to buy an Australian property through the Foreign Investment Review Board.
The $5000 fee is for property priced up to $1 million. The plan paper suggests the fee rise an extra $10,000 for every extra $1 million in the purchase price. So a $3 million property would cost buyers an extra $30,000.
The jail reference is in a table on page 10 of the Options Paper labelled "Developer fails to market apartments in Australia." It specifies fines of up to $85,000 fines for individuals or $425,000 for corporations. And "Imprisonment of two years or both".
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AU side finally waking up to the threat of China developers coming in to "goreng" their market.
I think developers must market locally as long as project financing is obtained from Australia. Don't think this will cause any issue to anyone. Sell 1 can circumvent it hehe
1% appears punitive to local buyers but will it really deter foreign buyers looking for a safe harbour?
Outrage over PM's property hit
Phillip Coorey and Matthew Cranston
1058 words
26 Feb 2015
The Australian Financial Review
AFNR
English
Copyright 2015. Fairfax Media Management Pty Limited.
New charges for foreigners' purchases Plan could 'shock the market' industry leader says
The federal government faces a backlash from the property sector over plans to charge foreign homebuyers a tax of up to 1 per cent to fund the scrutiny of purchases by the Foreign Investment Review Board.
Declaring the changes necessary to ensure the "Australian dream" of home ownership could continue, Prime Minister Tony Abbott and Treasurer Joe Hockey launched a series of proposals on Wednesday and gave every indication they would be adopted following four weeks of consultation.
Foreign buyers of new or existing residential properties and farmland would have to pay a $5000 application fee to the Foreign Investment Review Board for properties valued up to $1 million. A $10,000 application fee would apply to properties valued at over $1 million and would increase in increments of $10,000 for each additional $1 million in property value.
The fees, estimated to raise $200 million a year, would enable FIRB to enforce existing rules which decree foreigners, other than temporary residents, cannot buy established homes. Temporary residents must sell properties when they leave.
To help with enforcement, a new civil penalty regime has been proposed. Those breaching or circumventing the rules would be forced to sell the house and pay fines of whichever was highest: the capital gain, 25 per cent of the house's market value, or 25 per cent of the purchase price. Mr Abbott said the application fees were "not there to deter people" but were "to ensure that foreigners are paying their way".
"It will mean that foreigners who aren't playing by the rules won't be there in the system," he said.
"We do want Australians to be operating on a level playing field."
Ray White Real Estate chairman and industry doyen Brian White said the fees could "shock the market".
"And no market appreciates or responds well to shocks," he said.
"It has connotations back to the aborted vendors tax proposed by the NSW Treasurer Michael Egan that needed to be abandoned due to market response."
The Property Council of Australia said it supported the enforcement of existing rules on foreign ownership but the application fees were excessive and a stamp duty by stealth that would drive up house prices and rents. The council was especially angry about the proposal to apply the fees to new residential housing, saying it would exacerbate an already growing housing shortage.
"Foreign investment, be it from the UK or China, underpins new residential housing supply in Australia," said council chief executive Ken Morrison.
The NSW government imposed a 2.5 per cent tax on investment properties in 2005 but was forced to abandon the tax a year later.
CBRE residential projects chairman Justin Brown said the new taxes were counterproductive and ill thought through.
"There is significant global evidence from recent times including Canada, Singapore and Hong Kong where these types of taxes on foreign investment have been totally counterproductive, caused significant corrections within the markets and harmed the construction industry," Mr Brown said.
Mr Abbott said the proposed fee structure was comparable with a system in New Zealand but less punitive than regimes in Singapore and Hong Kong.
"We are open to foreign investment but it's got to be foreign investment that is in our national interest,' Mr Abbott said.
Melbourne-based buyers advocate David Morrell said the fees were not high enough.
"I'm bidding at one auction on Saturday and my due diligence has uncovered that up to three foreign investors are looking at the property. The new fee schedule will just be deemed the cost of doing business and frankly 1 per cent is pathetic. It's hard to even value property within 1 per cent," he said.
"Clearly they know there is a problem. It hasn't been fixed and I'm not sure the framework is tough enough to realistically do it.
"Civil penalties will work but only if they're substantial and easily enforced. What would really threaten third parties is if they lost their relevant licences. It looks like it's a long way to go till something with real teeth can work. In the meantime, we continue to give the farm away."
The Real Estate Institute of Australia also welcomed the resolve to enforce the current rules but took issue with the application fees as being "on the high side".
Master Builders Australia chief executive Wilhelm Harnisch was supportive of the initiative.
"I am more relaxed now - this is not about anti-foreign investment, it's about making sure there is compliance. 'The FIRB hasn't been able to deal with alleged breaches. The FIRB should be appropriately resourced so the levy has to be looked at in that context."
"It is very important that the fee be transparently allocated to the FIRB to fulfil compliance obligations."
The proposed fees are higher than the maximum $1500 recommended on a bipartisan basis by a Parliamentary committee. Mr Abbott said the increased fees were recommended by a committee of his backbenchers.
The government will establish a compliance unit within the Australian Taxation Office, a register of foreign ownership of farmland, houses and agribusiness, and improve information between agencies to help with enforcement. The government is also considering extending civil penalties to the purchase of business and commercial real estate even though there is limited evidence to suggest non-compliance in these areas.
Also on Wednesday, new Treasury secretary John Fraser blamed the surge in Sydney property prices on cheap money and wealthy Chinese investors, factors making real estate expensive in other cities around the world.
Mr Fraser said surging prices in pockets around Sydney Harbour and elsewhere mirrored similar developments in London and New York.
"It's a worldwide phenomenon," he said, noting that causes include very loose monetary policy and money coming out of China.
Mr Fraser said he did not rate Australia's housing market "that highly as a risk" to the economy, and has spoken with bank regulators, who last year announced plans to introduce restraints on lending to riskier markets and investors.
"I'm confident the measures they're bringing in will help," the treasury secretary told a senate committee in Canberra on Wednesday.
WITH SAMANTHA HUTCHINSON
Fairfax Media Management Pty Limited
Document AFNR000020150225eb2q00005
As usual everyone whine down under. We (presumably Singaporeans here) have to understand aussies system works different from ours. Lots of NATO