Asian investors to fill Chinese void

Chinese outbound investment into Australia fell in the first half of 2017 with a total of $US496 million ($628 million) invested, largely in the hotel sector, according to Cushman & Wakefield Research.

The crackdown is likely to hit mainland developers hardest as many must fund their projects without the help of local banks.

Commercial Insights: Subscribe to receive the latest news and updates

Concerns are also emerging about how a slowdown would impact on owners of income-producing towers as some Chinese groups are exiting a portion of their holdings.

High-profile developer Aqualand, which is best known for its luxury Sydney developments, is the latest to consider selling. One of its North Sydney sites in Miller Street is slated for sale.

Nearby, Chinese group Fosun is also weighing up options for a tower it bought in early 2015 with the now listed group Propertylink.

Both companies are likely to sell out of these towers profitably.

Singapore-based Chinese investment house Bright Ruby has tapped real estate agencies JLL and Colliers International to sell its Elizabeth St building.

The group picked up 231 Elizabeth St in 2013 from Investa Property Group and its main wholesale office fund, ICPF, and the tower could win bids around the $350 million mark.

Even without a large number of Chinese groups chasing sites, local developers are tipped to vie with office landlords to buy the tower.

The retreat of Chinese capital has sparked some concerns as top institutions have struck major deals, including CIC buying the $2.45 million Investa Property Trust, and Ping An backing office deals.

But experts pointed to the rising influence of Korean and southeast Asian groups with ambitions to buy in Sydney as a fresh capital source.

This article originally appeared on www.theaustralian.com.au/property.