Chinese property exodus gains pace with $120m Waterloo sale

Mecone was engaged by Dahua to prepare detailed designs (artist impression above) for the former Sydney Water site in Waterloo.

Major Chinese companies are continuing to slash their Australian holdings, with property developer Dahua Group selling a major project to local developer DASCO for more than $120m.

The Shanghai-based company’s exit from the project will add to the mounting list of Chinese property developers who have either exited or sold down their Australian holdings.

Dahua last year also put one of its big Melbourne estates, known as Riverhills in the city’s north suburbs on the block, but it is yet to trade.

The Chinese company is selling out at profitably in Sydney. It picked up the site from Sydney Water at the start of the Chinese apartment boom in 2014 for just over $41m.

But it is going for less than its boom time value, and at one stage it was being touted as being worth $185m. Colliers agents Guillaume Volz, Eugene White and Trent Gallagher handled the sale but declined to comment.

Others have also been selling down, and in January Chinese developer Country Garden took another step towards exiting Australia after agreeing to sell its stake in a $2bn masterplanned community on the outskirts of Sydney.

Its local subsidiary Risland Australia agreed to sell its interest in the 330ha Wilton Greens development, about 65km southwest of the CBD. Local residential developer Avantaus is paying about $240m for the interest in the project.

The shift away from Australia has been driven partly by the difficulty of getting projects up in the local market but has also been forced by Chinese government dictates to get out of luxury projects.

DASCO said it had acquired one of the last remaining major scale residential development opportunities on Sydney’s city fringe.

The 19,486sq m site on Bourke St sits 4km from the city, and has approval for a six-building mixed-use site, including 373 apartments and a new urban village.

DASCO general manager Michel Najjar said as one of the best lifestyle sites in Sydney’s inner city, it was in a prime location with access to amenities. “This is a tightly held urban oasis and there’s been an incredible amount of work that’s gone into planning and designing the project, making it one of the most significant new residential development opportunities in Australia,” he said.

Other Chinese groups have been selling out.

This month, Japanese developer Sekisui House picked up a major site on Sydney’s north shore from two Chinese companies for close to $110m, as they wanted to cut their exposure to the unpredictable high-rise market.

It was sold by developers CIFI St Leonards – a unit of a Hong Kong listed company – and Greaton, which is best known for The Ribbon project at Darling Harbour.

CIFI cited the need to ease its offshore liquidity pressure and to finance its business operation as reasons for selling. It also called out interest rate hikes and the rise in construction costs in Australia.

In 2022, Hong Kong-listed China Aoyuan Group handed over control of its local operation in a move that saw it take a $245m loss.

Rivals including Poly and Shimao have also put assets up for sale as the property cycle turns against them, while Greenland and AW Holding Group sold assets.