Chinese to build new $1bn Gold Coast city
Vast sugar cane lands on the northern tip of the Gold Coast have fallen into Chinese hands in a $1 billion-plus deal that could see the rural landscape transformed into a new city by a Chinese theme park entrepreneur.
Chinese company Songcheng Performance Development is striking the deal to give it control over a giant swath of land in the Norwell Valley between Brisbane and the Gold Coast.
The group is laying the foundations for an entire city with housing, office, health and educational precincts to be developed over 25 years, with a spending spree on infrastructure planned to tie up with existing road networks.
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While the deal is subject to Songcheng’s due diligence, it would see a new masterplanned city developed with ambitions for it to become a service hub for local and international tourists.
Details of the nascent deal are tightly held but the owners of the 6117ha of farmland have been briefed on the deal and have formally agreed to the sale.
For Songcheng, backed by Chinese billionaire Huang Qiaoling, a deal would dramatically boost its ambitions in Australia.
Huang is one of China’s most successful theme park entrepreneurs and is also one of the 10 biggest in the world.
The Shenzhen-listed company last November unveiled plans for a $400 million cultural theme park on a $55 million riverfront Nerang site on the Gold Coast.
The buyer’s one of four offshore groups that put their hands up — three from China and one from the Middle East
Representatives of the company, including Songcheng chairman Huang Qiaoling and CEO Huang Hongming, met Prime Minister Malcolm Turnbull when that deal was unveiled.
It appears keen to pursue the latest deal, making a partial payment on the “substantial deposit” required to secure the deal.
The farmers involved have been tight-lipped but when complete the transaction could amount to Australia’s largest land sale. Roland Evans, the Canford Property Group principal who has been marketing the land, says the purchase could be settled by mid-2018.
“The buyer’s one of four offshore groups that put their hands up — three from China and one from the Middle East,” he says. “The first offer came in at $550 million and offers have progressed upward from there.”
Such a transaction would be almost unprecedented with only last month’s deal between Springfield Land Corp and Chinese companies R&F Properties and Etone on an apartment development project with an end value of $6.3 billion comparable in scale. Evans declined to identify the buyer, saying only it was a listed company worth billions of dollars that would spend between $25 million and $35 million carrying out due diligence.
“If the sale goes ahead, it will be a financial saviour for the cane farmers — many of them are in a state of despair over the challenges they face in the sugar industry,” he says. “They’ll be debt free and able to farm their land for the foreseeable future — until it’s required by the buyer.”
The Chinese company is pitching its city as not only providing construction and tourism jobs but also higher skilled education and health industries.
Evans said the group is preparing submissions to the Gold Coast City Council and Queensland government.
– with Ben Wilmot
This article originally appeared on www.theaustralian.com.au/property.
