Jewel dispute won’t dampen Yuhu’s Sydney surge
Chinese-backed company Yuhu is pressing ahead with its ambitious roster of Sydney projects, including luxury hotel and apartment towers at the Gold Fields House site at Circular Quay, despite problems at its massive Jewel development in Surfers Paradise.
The $1 billion Queensland project was hit by walk-offs last week as workers raised concerns about the project’s progress with the developer and main contractor, Multiplex.
Work on Jewel began in 2016, when it was owned by Chinese groups Ridong and Wanda. It was bought out by Yuhu in January in a $1.13 billion deal that included Gold Fields House. Delays have prompted concerns that a mid-2019 completion date will not be met.
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The three-tower project, comprising 521 residences and a 169-room five-star hotel, has been hit by construction scheduling issues on the lower podium levels of the proposed hotel.
Yuhu intends to wait until it has selected a hotel operator — in a process being handled by Colliers International — before finalising its design.
Just over a month after a launch attended by Yuhu executives, including founder Xiangmo Huang’s son Jimmy Huang, the Chinese-backed developer has distanced itself from problems on site and privately insisted these are matters for Multiplex. But it is understood Yuhu is committed to Multiplex as “major construction partner”. The developer last week “reconfirmed” its commitment to delivering the Jewel project after media reports of trouble on site.
Real estate experts queried whether Yuhu had been hit by China’s recent clampdowns on investing in glitzy offshore projects, with rivals including Anbang and HNA Group divesting international holdings.
However, Yuhu confirmed that “all payments” to Multiplex that were “due and payable in accordance with the contract” had been made.
Property executives noted that the original contract had been struck with Wanda, and Yuhu may be just “flexing its muscles” as the incoming developer rather than looking to split from Multiplex.
Yuhu was upbeat about the interest in the hospitality component of Jewel project from “several” major international hospitality groups. But progress on apartment sales is unclear as works are being undertaken in-house and reportedly at lower price points than Wanda was seeking.
Yuhu says its Sydney projects are held separately, but apartment sales at Sydney’s One Circular Quay project have yet to be relaunched as it redesigns parts of the development.
Yuhu has further major payments to make. Last year it snapped up the Bakehouse Quarter in Sydney’s inner west for $380 million.
It paid a call option fee of $38 million in June 2017. The latest purchase agreement with vendor, the Kirela Development Unit Trust, was released last Friday.
This article originally appeared on www.theaustralian.com.au/property.
