JEWEL, a $1 billion residential resort complex currently rising over the Gold Coast, is probably the most visible proof to date of how rising Chinese investment in Australian property development is changing the landscape forever.

The multi-tower residential and resort project is backed by Asia’s richest man Wang Jianlin, and is the largest single project of the estimated $12 billion in Chinese investment in Australian property in the last financial year.

As evidenced by his substantial investment in Jewel, Mr Wang – who is chairman of China’s largest property development firm Dalian Wang – has set his sights firmly on Australia, stating his home country no longer held potential for easy profits. Yet for China’s ever-widening middle class, the appeal of Australian real estate stretches well beyond such hgh-profile developments. 

A characteristic of Asian families is their determination to seek better educational opportunities for their children – and a feature of recent investment in Australia has been a preference for property located near reputable Australian schools and universities, countrywide. For those with the means, purchasing foreign real estate equates to a long-term investment that is safe from Chinese Government intervention.

According to the Foreign Investment Review Board, Chinese buyers of real estate accounted for close to half of the total $27.7 billion foreign investment in Australia in 2014.

Juwai, China’s leading international property portal, ranks Australia as the second most popular destination for Chinese buyers, just behind the US, with its appeal rising recently against the background of the softer Australian dollar.

While the big-ticket sales of waterfront mansions and grand commercial developments create headlines, mid-range off-the-plan apartments and family homes in the suburbs increasingly form a large segment of listings on Juwai – a Shanghai-based, Australian-founded Chinese language property website.

It all adds up to a seismic shift in the Australian property market – a shift that real estate agents are having to adapt to fast, according to Real Estate Results Network (RERN) chief executive, Michael Sheargold.

“The real estate industry has evolved at a rapid pace over the last few years, with agents now working within a truly international marketplace yet also having to adapt their business model to accommodate the differing needs of clients in those emerging markets,” Mr Sheargold said.

He said while the spoils of China’s dramatically increased buying power and relaxed central restrictions were once confined to major centres, offshore buyers were now eyeing property across the country – reshaping the playing field for real estate agents seeking to capitalise on this sizeable new segment of the market.

“Agencies looking to set their business on an effective course for development must not only keep their eyes open to industry change, but also engage with new technologies and strategies to ensure their business is pursuing those new leads as we see a strong continuing trend of investment from Asian buyers,” Mr Sheargold said.

He has been driving change within RERN, to provide spcialist industry training, support, mentorship and resources for real estate agencies wanting to understand and develop the growing China market..

He said with a surge of 400 percent in Chinese purchases of Australian real estate over the last five years, many property agents have employed Mandarin-speaking staff to provide assistance and handle negotiations with overseas buyers, while also adapting their business websites to include Chinese layouts.

As part of a strategic effort to market property internationally, listings and promotional materials have also been translated into Chinese, in recognition of the far greater level of engagement achieved when targeting investors in their native language.

“We know that the internet is the first port of call for interested property investors worldwide, but reaching the Chinese market is more complex than an agent simply making their listings available online, even if they are translated into Chinese language,” Mr Sheargold said.

“The existence of firewalls means many international websites and social media sites are blocked to those within China, so to gain visibility agents are seeking to advertise their listings on locally hosted sites.”

For those agencies who have achieved successful inroads into the market, Mr Sheargold said it was prudent to establish a physical presence in China. This could be initiated by a trip to attend property expositions and meet with potential clients, as well as seek to form strategic alliances with local agents and development companies.

“China is in fact the perfect representation of the advantages of belonging to a network – the ethos on which RERN has been founded,” Mr Sheargold said. “In China, even more so than in the west, we see the success of business hinges on socialising and networking with like-minded individuals.

“The foundations for many deals are made in social contexts and for this reason, local agents find travelling to China to form personal ties with agents and buyers, by attending specialised industry conferences or meeting with local agencies, will lead to an improved ability to understand local customs and respond to the needs and interests of buyers in those markets.”

Mr Sheargold said establishing direct agent representation in China, or even opening a branch in cities such as Beijing or Shanghai, was a logical progression for agencies invested in major sales from the market.

Howeer, he said, independent agents in Australia could also work towards growing their brand in the Chinese marketplace through each personal interaction, alongside repeated exposure, through building a database of quality property listings geared towards the Chinese buyer.

Mr Sheargold said the spread of the Asian market was just another way the real estate industry model had changed, with RERN committed to providing expert support and services to help agencies and their teams reach their full potential in the new marketplace.

www.realestateresultscentral.com.au

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AUSTRALIAN tourism’s most significant hotel refurbishment and extension is underway at Jupiters Hotel and Casino, on the Gold Coast, as Star Entertainment, formerly Echo Entertainment Group, progresses with the property’s $345 million transformation.

Star Entertainment Queensland managing director Geoff Hogg said the revitalisation of Jupiters’ Hotel was the first major upgrade in the history of the property that, when it was built in the mid-1980s, re-defined luxury accommodation and entertainment on the Gold Coast.

“The extensive renovation will see all rooms completely revitalised to offer both business and leisure travellers a world-class experience,” Mr Hogg said.

While the $75 million initial revitalisation of the property’s almost 592 rooms, together with work already completed around the pool and hotel façade, will be completed in 2016, construction has launched on the 17-storey, luxury six-star suite tower at the front of the property.

The 80-suite tower offers what is known as a ‘six-star’ experience and features some of Australia’s most luxurious accommodation environments. 

“The six-star hotel is the signature piece of the transformation of Jupiters which will redefine luxury and take personalised service to a completely new level,” Mr Hogg said. “It is the centrepiece of what will be the most exciting part of the development.”

Mr Hogg said the hotel targets high value travellers and so-called ‘high-rollers’ gambling guests, especially those from Asia.

Suites range from one to four bedrooms and all have private balconies with extraordinary views over Gold Coast beaches and the Hinterland. The top 10 levels feature what are being called ‘super-suites’ with huge balconies that even offer guests indulgent ‘bathtub views’ of the Pacific Ocean.

The strong focus on getting the in-room experience right at Jupiters Hotel is indicative of the amount of focus Star Entertainment Group is placing on developing its Queensland properties.

Mr Hogg said the team worked with six prototype rooms in early 2015 to help shape the details and ensure the end product delivered an experience visitors to the Gold Coast would go home talking about.

“The prototype rooms have given us the ability to work closely with our team and selected guests to get their feedback on design, functionality and the ambiance of each room, and the response we’ve had so far has been fantastic” Mr Hogg said told the Gold Coast Bulletin.

Internationally renowned architects Steelman Partners styled the rooms in a way that aimed to create a sophisticated and modern feel that would complement the Gold Coast’s relaxed beachside lifestyle. This vision has been delivered on the Gold Coast by ML Design, a respected South East Queensland architectural practice.

The rooms feature  state-of-the-art lighting and technology, iPad connectivity and smart televisions, while offering guests the very best in terms of luxury finishes, including marble and stone sourced from Italy and Turkey, rain-head showers and luxurious new bedding.

Mr Hogg said new digital signage has also installed throughout the property, particularly to guide hotel guests who are visiting for a conference or event.

www.jupitersgoldcoast.com

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AUSTRALIAN competition reforms – proposed by the Harper Review – can boost national prosperity and recover from many years of poor infrastructure policies and practices.

That is the view of Australian Competition and Consumer Commission (ACCC) chairman Rod Sims.

“We see policies that prevent competition in coastal and liner shipping, inadequate dedicated rail freight paths, a poor policy framework for road investment, limits on supply and competition in urban water, costly past rules for energy network regulation, limits on infrastructure competition in many areas, and I could go on,” Mr Sims told the recent Infrastructure Partnerships Australia conference in Sydney.

“Into this environment comes the Harper Review of competition policy. It is extremely timely, and has important recommendations on many fronts.” 

Mr Sims said three areas would further harm Australia’s future productivity and prosperity if not addressed: road reform, privatising infrastructure assets with the wrong objectives in mind, and monopoly rent extraction by asset owners.

Mr Sims pressed the need for road reform, outlining a way ahead that is “entirely doable and saleable” with two steps.

“First, the revenue raised from road use should flow directly to the entities that build and maintain our roads,” he said. “Second, the level of these road user charges should be set based on the need for future road expenditure.”

Mr Sims warned against privatising infrastructure assets in situations where immediate financial benefit became a ‘tax’ on future generations.

“Some of Australia’s key infrastructure assets, including significant ports and railways, are likely to be privatised in the coming years,” Mr Sims said. “The value of the assets to be sold is likely to be high and governments have begun announcing projects they will invest in as a result of the profits generated from these privatisations.

“This creates a strong incentive for governments to structure their privatisation processes in a manner that maximises the sale price they receive. In order to maximise sale prices, governments will have little incentive to closely examine whether the market structure and regulatory arrangements that will apply post-privatisation are conducive to competition and appropriate outcomes.”

Mr Sims warned about infrastructure owners possibly engaging in “monopoly rent extraction” – challenging the view that policy makers should pay no attention to the ability of a bottleneck monopolist to extract rents from upstream or downstream firms in a commodity export supply chain.

“Monopolies can be harmful in that they can limit investment and innovation in upstream or downstream industries. Monopolies, therefore, generally require effective economic regulation.”

www.accc.gov.au

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According to a report by Accenture for the City Initiatives for Technology, Innovation and Entrepreneurship (CITIE) group, delivered at the 2015 Asia Pacific Cities Summit in Brisbane, cities are hotbeds for developing innovative, fast-growth businesses. The City of Ipswich in Queensland is firing up that concept by creating its new business incubator in the former Ipswich Central Fire Station it now owns.

By Mike Sullivan

IPSWICH City Mayor, Paul Pisasale, has never been backward in coming forward – and he doesn’t mind taking the lead on what’s good for his city. So it comes as no surprise that Ipswich City Council is helping start-up businesses to find their feet – but it is surprising how much support the council is throwing behind local entrepreneurs and innovative early-stage businesses.

“It’s the way the world’s going and it’s the way the city is going,” Cr Pisasale said. “We are ahead of the game.

“You have got to look after your neighbourhoods and your early stage businesses. Incubators and technology is the way of the future.

“It’s where the  future jobs are and where we are all heading … and if you don’t head there your city is going to be lost and won’t have the communication that is needed to take this thing forward.” 

The momentum behind the Ipswich incubator is what is revealing. The council has bought the old Ipswich Fire Station in the heart of its central business district and is re-fitting and re-purposing it as a hub for entrepreneurs. The complex will be named 1860, for the year Ipswich became a municipality.

But Ipswich is a smarter city than just re-purposing property – it is doing so in alliance with local business mentors and support services to provide the business development environment and skilling ‘software’ to go with the ‘hardware’ within the incubator.

The city has also had a long look at how other incubators are working around the world, especially taking a lead from the successful Chicago digital business incubator hub, named 1871. Chicago’s hub took its name not from the great Chicago fire of 1871, but for the innovation that came in the disaster’s aftermath.

DIGITAL RECORD

Ipswich is not making things up as it goes along – the South East Queensland city has a substantial record for innovation and hi-tech business development in its own right, including Australia’s largest aerospace precinct at Amberley.

In 1994 the city was also the first in Australia to set up its own internet service provider (ISP), Cr Pisasale said. Ipswich’s thriving satellite city of Springfield was the one of the earliest developments to provide for broadband connectivity for all new homes and its commercial district. The Polaris Data Centre development at Greater Springfield was also one of Australia’s first major commercial data centres.

“You have got to go back to 1994 when the city became the first one in Australia to set up its own ISP,” Cr Pisasale said. “No-one had even heard of the internet or even had an e-mail address.

“We went down that path, because we could (even then) predict that the jobs of the future were in technology. Then you had iTel and the other things we got involved in. This is the next step in that journey.”

He lamented the fact that the National Broadband Network (NBN) had been mired in political and regional arguments over the technical aspects of the roll-out.

“What they should be talking about is what it is going to do to enhance your community or your city,” Cr Pisasale said. “So that’s where we are heading. We know the power of that, making your city able to communicate anywhere in the world and being able to run your business from it.”

The 1860 business incubator program is just one aspect of the lead Ipswich is taking in helping to foster business development in the global digital economy. Ipswich also this year appointed Matthew Schultz as its first city digital officer and he has been instrumental in helping to establish the incubator.

Cr Pisasale said 1860 was being established as a both a physical and online hub, but with vital business local networks engaged in its formation and operation. 

“Councils are very good at giving out sporting bursaries and cultural bursaries, but what this is all about is giving out those bursaries to pick up the entrepreneurs in your community,” Cr Pisasale said. “It will pick up start-up businesses that you can nurture and help survive with mentors.

“And finally it will help to train people out there who are so busy being busy that they don’t know how to take their businesses forward – and if they don’t do this, they’ll fold.”

Cr Pisasale, who wears an Apple Watch primarily to receive council and community messages, said the city was well poised to reap the benefits of the digital age because the council was already attuned to its potential.

“It’s about how you embrace technology,” he said. “We are seeing it – not only in the jobs that are being created, but also in the age demographics of the city.

“The state average is 36 (years) and we are 32 and declining – so young families are coming into this city and becoming involved. The young people, they get it.

“The City of Ipswich is going to be known as a city of innovation now. The key for us is that there are no more boundaries,” he said, remarking that Ipswich was recently voted in the top seven Most Intelligent Communities in the world by the Intelligent Community Forum in New York.

He said it proved Ipswich’s challenges and opportunities were no longer focused in Australia but “we are worried about China and Taiwan and Hong Kong and the US and the UK …”

Cr Pisasale said the 1860 hub would energise the Ipswich business community.

“It’s really the Olympics of information. The Olympics of technology,” Cr Pisasale characterised the business development environment. “We see them (Ipswich entrepreneurs) running the Olympic 100m … and someone saying that idea came out of Ipswich.

“More importantly, the idea did not go overseas and come back. I want to sell it to overseas, but I want to make sure the nurturing place was Ipswich and Australia.”

www.ipswich.gov.au

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