Now this is interesting. The Australian Financial Review reports that a major US bank is now pushing into the Australian commercial property market.
We’re not talking small change here either. US bank PGIM Real Estate Finance just originated a $165 million mortgage for a Sydney tower.
Apparently the bank is not alone. The paper says that ‘a number of international funders selectively challenge the dominance of the big four banks in local commercial property lending.’
Now contrast this against the general view that Australian real estate is overpriced and primed for a fall. PGIM says it sees good opportunity in Australia commercial real estate. I think it’s safe to assume this US bank has done due diligence on the Australian market.
There’s plenty of opportunity it seems. There’s certainly still plenty of development happening in Australia. Last week, for example, the Victorian government revealed a planning blueprint for its news Arden precinct in North Melbourne. It could be developed to house 15,000 residents over the next 30 years.
That’s not all. Malaysian developer SP Setia just lodged plans for two towers in Melbourne’s CBD. The total cost is estimated at $640 million. It’s due to begin in the second half of FY2017.
But even bigger than that is Lendlease’s Quarter project. The company has approval for almost $1 billion in apartments across three towers again in the Melbourne CBD.
But now comes the absolute monster to keep an eye on. The Gold Coast Bulletin reports that a parcel of sugarcane land that’s 10 times the size of Surfers Paradise is up for sale. It will cost over a billion dollars and break the national land sale record if it happens.
Apparently a ‘new coastal city’ is being proposed between Brisbane and the Gold Coast. The suggestion is Chinese developers – possibly China’s richest man Wang Jianlin – may be enticed to also build the world’s biggest theme park in Queensland as part of the deal. It could take a decade just to bring the project to fruition such is the scale of approvals, planning and infrastructure required.
Certainly this is nothing more than a proposal yet. But it gives you some idea of the enormous projects being considered around the world. It’s why, over at Cycles, Trends and Forecasts we continue to say the world is on track for the biggest boom of all time. Go here to see why.
By Callum Newman,
Associate Editor, Cycles, Trends and Forecasts