Overseas Investment

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SPONSORED POST
While Australia’s property market remains a safe haven, limited stock is a significant obstacle for overseas investors, Napier &amp; Blakeley’s managing director Alastair Walker.
“There is still a substantial amount of investment funds under management looking for a home – and the volatility in other markets serves as a reminder that Australia remains a safe haven,” says Walker, who oversees the independent property, development and sustainability consultancy.
The latest investment intentions survey from the Asian Association for Investors in Non-listed Real Estate Vehicles (ANREV) reports around AU$82.4 billion is expected to be poured into property in 2016, with the top three investment destinations in the regions of Tokyo, Sydney and Melbourne.
“Opportunity is now the great conundrum facing investors,” Walker recently blogged.
“Australia presents a transparent market with a good yield to debt ratio, but a shortage of stock is limiting investment opportunity.
“The local property investment groups who have righted their ships in the last seven years after the Global Financial Crisis are now heavily challenged by offshore investors, some with very deep pockets.”
“Our chairman, Peter Mitchell, is based in Singapore, and travels around Asia talking to investors and we get reports back every day, especially from Chinese investors wanting to get into the Australian market. These aren’t just big global funds, but a range of investors who see Australia, and particularly Sydney, as an attractive destination,” he adds.
While Sydney and Melbourne remain the “first choice” for offshore investors, Walker says they are increasingly looking further afield – and are looking beyond traditional shiny new offices.
“Expect retrofitting of existing assets – something that has been slow off the mark – to become a bigger thing in 2016,” Walker says.
Established in 1985, Napier &amp; Blakeley is an independent and privately-owned, international, integrated, property services consulting organisation. 
Contact one of our specialists for <a href="https://nbtax.com.au/" target="_blank">further information</a>.
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Opportunity is the great conundrum for commercial property investors

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A consortium led by a Macau casino boss Loi Keong Kuong-led has emerged as paying $56.5 million for Gold Coast site recently offloaded by the Hong Kong-based Forise.
Forise had paid $65 million for the 3,494 sqm site in 2015 with plans to build the Southern Hemisphere’s tallest tower.
It then spent a reported $40 million plus on construction of a six-level basement.
Roland Evans, at Canford Estate Agents, said the new owners intended to develop the planned 89-floor tower but changing the interior design and layout to incorporate a luxury-brand hotel.
The consortium members are operating through trustee company 3 Trickett Street.
The ownership of company 3 Trickett Street is primarily held by the Loi family and, according to company records, includes Chinese billionaire Riyu Li, one-time investor in the three-tower Jewel beachfront project south of Surfers Paradise, with 10 per cent.
Loi, who owns Macau’s Rio casino, also paid $90 million in early 2018 for the Soul Boardwalk retail area north of the Spirit site.
The local paper The Gold Coast Bulletin reported Forise’s disastrous Gold Coast foray saw it locked out of a $3 million sales display suite close to the Spirit site.
Yun Wei “Fenix” Dong, was the CEO of Forise Investment Australia, the company behind the abandoned Spirit development.
Creditors were taking legal action over unpaid debts, including WorkCover Queensland, which sought an application to wind up the company to recoup $19,000.
Parties connected to the development have now been paid and the few buyers have had their deposits refunded.
Forise had engaged The Agency projects team to exclusively sell and market Spirit, the $1.3 billion Gold Coast residential tower.
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The collapse of Forise impacted on The Agency projects team, since it was the biggest deal signed by the division headed by Steven Chen.
Spirit had 479 DBI designed apartments to sell, including an entire floor penthouse, boasting over 1000 sqms that Chen expected to sell for in excess of $30 million.
As its building base works commenced in the first quarter of 2017 The Agency was expecting commission to flow following its 2020 completion.
During the company’s embarassing exit, chairman Xin Wang sold his $3.6 million 68th floor sub-penthouse in Soul, with Paul Ledgerwood at The Agency securing the sale, in conjunction with Laura Langford at Canford Property Group.
It had been bought for $3.5 million in 2013 from Juniper, the developer.
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Macau casino boss boosts Gold Coast market with Forise acquisition

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Off-shore investors are making a lot of investments across Melbourne’s eastern corridor property market, with more than $1 billion in acquisitions over the last five years, according to CBRE.
Director Investments, Mark Wizel, said the off-shore buyers accounted for marginally under 50 per cent of buyers (116) of the 234 properties, which sold through CBRE alone, for a total of $2.43 billion over five years from 2014.
Mr Wizel said the bulk of the acquisitions had been sub $30 million however the list included two major acquisitions - the Burwood One Shopping Centre ($181.5m) (pictured in title) which sold to a Hong Kong investor, and 353-383 Burwood Hwy, Forest Hill which was purchased at an undisclosed price by a Chinese buyer.
According to a Fairfax media study from August 2017 based on data from the 2016 Census, the eastern suburbs, and particularly Glen Waverley and Box Hill, are dominated by Chinese migrants as the second most populous group after Australian born residents. In Box Hill, near the centre of the eastern corridor, almost 30 per cent of the population was born in China.
Some of the most recent sales to off-shore investors include:
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<li>12 Lakeside Drive, Burwood East - $25.5m;</li>
<li>Maroondah Shopping Centre - $18.8m;</li>
<li>941-947 Whitehorse Rd, Box Hill - $13.3 million;</li>
<li>60-62 Maroondah Hwy, Ringwood - $28.3m; and,</li>
<li>42-50 Burwood Hwy, Burwood East - $18.17m.</li>
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Mr Wizel said, "I expect an equally strong response from the international investment community to several investment opportunities currently on the market including iProsperity Group’s Century City Walk Shopping Centre and the adjoining 200-room Novotel Melbourne hotel on Springvale Road, Glen Waverley."
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Off-shore investors spent over $1 billion in Melbourne’s east

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GUEST OBSERVATION
Skilled professionals are increasingly likely to have an equally skilled partner at home. This makes it harder for companies to fill overseas positions when the move affects two professional careers.
Multinational corporations are starting to recognise and try to understand the complexities of managing talent globally. But we wondered whether they are considering the “right” scope of complexities. As an example of these complexities, and contrary to popular belief, the expatriate spouse – not the expatriate – remains the number one influence on the success of overseas postings.
Three major, interrelated elements create this largely unrecognised complexity.
The family context
An overseas assignment can be an enriching experience for the whole family, but making it a success is a different story. Career paths are no longer choices for a single breadwinner, but compromises between couples or within families.
This means there are a number of stakeholders to consider when an overseas assignment is on offer. The dynamics between the various immediate family members play a major role in whether the assignment is a success.
Research often reports organisational support for spouses as either inadequate or misaligned. One reason for this is that organisations do not have a good enough understanding of expatriate spouse experiences and attitudes to relocation.
Most recently, research has identified that there are four different types of spouses – some more resilient and ready for an international relocation than others. This is to say that spouses and their personal and professional career endeavours may differ greatly. And the lack of knowledge about this makes it difficult to manage.
The reason for any inadequacy or misalignment of organisational support might well stem, then, from not fully understanding the journey of the other family members who are likely invested but involuntarily affected by the way the assignment is managed.
This type of reasoning similarly applies to families with a female breadwinner, families with or without children, those who identify as LGBTIQ, single parents and families going through a divorce, among other scenarios. The chart below illustrates the range of family contexts.
<img src="https://images.theconversation.com/files/232212/original/file-20180816-2915-sgy80t.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="">
Corporate support for people on overseas assignments needs to consider the diversity of possible family contexts. Author provided
Philosophically, it is about managing the family as a dynamic and complex network of actors. That is in addition to the complexities inherent in any particular individual employee or family member.
The assignment context
We are seeing an increase in the types of international assignments, including short-term, long-term, rotational, flex-assignments and so forth. You can add to this the propatriate (a professional expatriate committed to their parent company), the glopatriate (a globetrotting expatriate committed to a global career beyond their parent company), the inpatriate (a relocation from the subsidiary into HQ) and the self-initiated expatriate (a non-organisational form of expatriation) among others. We now have many assignment types – some of which have not existed or been recognised as such, say, ten years ago.
The assignment type matters to the multinational corporation. It is the context for the length, purpose and expatriate and family allowances of the assignment.
The location context
Globalisation continues to create opportunities across borders. These in turn are linked to international assignment opportunities.
Today, countries like China, Brazil, India, Argentina, Mexico, Russia, the United Arab Emirates, Saudi Arabia, Angola, Nigeria and Iraq present some of the greatest challenges for international assignees, their partners and children.
But what do we really know about these countries? And to what extent are dual-career families ready (or supported) to relocate to these places and be successful – as a family or as individuals?
Another difficult challenge to manage is the fact that some assignment locations are considered more dangerous than others. Some research suggests this keeps potential expatriates and their families from considering the assignment in the first place.
Managing challenges of diversity is key
In short, the increased diversity of assignments – in all ways – presents policy and compliance challenges for talent management departments. Creating the right tools to enable multinational corporations to understand and respond swiftly to these challenges is key to competing and winning with a global talent strategy.
Global mobility specialists must fully understand past, present and potential trends to then acquire the agility needed to manage talent in today’s world – across diverse demographic, assignment and family contexts.

In the end however, if the expatriate and their family are not convinced this will be a good experience, no amount of deliberation or support will make it a success. The real key to success is to ensure the expatriates and their families understand their “window of opportunity” for such a life-changing move.
Miriam Moeller, Senior Lecturer, International Business, The University of Queensland
Jemaine Tsoi, PhD Researcher, UQ Business School, The University of Queensland
This article was originally published on <a href="http://theconversation.com" target="_blank">The Conversation</a>. Read the <a href="https://theconversation.com/the-secrets-to-managing-overseas-postings-for-modern-families-start-with-the-spouse-100893" target="_blank">original article</a>.
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Starting with the spouse is the secret to managing overseas postings for modern families

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Sydney and Melbourne have traditionally been a favourite of offshore property investors, but now Canberra seems to be catching up, according to real estate firm Colliers International.
The firm expects several new entrants in Canberra over the next 12 months, according to a media release.
Matthew Winter, an investment services executive at Colliers, met investors in Singapore, Hong Kong, Shenzhen and Guangzhou and learnt about their interest in Canberra. 
“Investors are keen to learn more about Australia’s capital city, Canberra,” he said. 
“Over the past six months there’s been an increase in enquiry to secure Canberra assets by foreign investors, however, many large investors are sitting back and watching the property market before making their move.”
Canberra Airport will offer direct flights to Singapore later this year, making it easier for investors to visit the city and inspect potential assets, he said.
“Asia-based investors understand the relative value of Canberra assets with long-term government tenants, which was seen with the Louisa Lawson building sale late last year for $225 million to South Korean property investor, FG Asset Management. The building was sold with a cap rate of six per cent which is a much better return compared to what many Asian investors are getting in their own countries.”
He cited the example of Japan which currently has negative interest rates and a bond yield of 0.2 per cent, while investing in Australian property can easily earn six to seven per cent returns in the long term.
One of the obstacles of securing foreign investment in Canberra is the scale of property, which is often significantly smaller than what investors are after, according to Colliers International. Many wealthy private investors and syndicates in Asia are looking to spend in excess of $100 to $150 million to build large-scale precincts or acquire large core-plus assets. 
Asian city skylines are filled with apartment towers as developers try to achieve the maximum yield of units on the sites. Often these developments are built quickly and the quality of the developments vary. 
In Shenzhen, single developers are known for constructing 15 to 20 towers on one site, more than 40-storeys high per tower and the design of the towers are identical.
In Singapore, the landscape looks significantly different to many other Asian cities. Singapore has a mix of heritage and new buildings, however, they have a lot of planning controls in place to encourage the development of green buildings and green living. Many developments are of high quality and designed to be environmentally friendly.
Matthew said that more than 100 investors gathered in Singapore to hear from Colliers about the Australian property market on his recent trip.
“Unlike in Hong Kong and China where majority of investors are wealthy privates and developers, Singapore has more Institutions and REITs looking to invest in Australia.
Colliers has showcased 97 properties across nine Asian cities in the past three years, meeting with Asia-based investment groups which has resulted in more than $1 billion in property transactions.
 
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