Shimao Group turns attention to Sydney towers
Shimao Group, controlled by Chinese-Australian billionaire Hui Wing Mao, is scouring Australia for more property investments, including rural assets, after revealing it was an early bidder for the Kidman cattle empire.
The group hopes to make a purchase this year, aiming for similar acquisitions to its $390 million Sydney CBD office building purchase in late 2014, according to Bernard Chiu, a lawyer and property adviser who has been a local director of Shimao in relation to its Australian acquisitions.
Shimao had teamed with an Australian agricultural company to bid for the country’s largest landholder, S. Kidman & Co, but walked away as the sale sparked growing concerns over foreign ownership of Australian land, Chiu says.
Kidman is set to be bought by two Chinese companies and a small Australian firm for about $371 million, pending the Treasurer’s approval.
Shimao may target rural properties after withdrawing from the race to secure the S. Kidman & Co property empire.
Shimao spent $390 million buying 175 Liverpool St at the end of 2014, with plans to hold the property as an investment for seven to eight years before redeveloping it.
Meanwhile, Shimao has been running the ruler over a couple of towers in Sydney, looking for comparable buildings in good locations and with attractive yields, Chiu says.
“Shimao is looking for similar buildings to the one we bought one year ago, probably a similar size in the range of $300m to $400m,” he says.
The company would like to buy towers showing a yield of 6% to 7%, he adds, noting yields have been too tight for most buildings in the current market.
It is understood that Shimao has considered the iconic David Jones menswear store on Market S, which has been for sale since February as its South African owner Woolworths looks to focus on the redevelopment of the adjacent flagship Elizabeth Street store.
The David Jones store on Market St in Sydney remains up for sale.
The 2150sqm site has long been eyed by developers attracted by its untapped air rights, wide floorplates and corner position in the heart of Sydney’s retail hub, with Westfield shopping centre owner Scentre also confirming interest.
Elsewhere, Shimao considered the Zenith office buildings at Chatswood on Sydney’s north shore, owned by Dexus Property Group and GPT Group’s wholesale office fund and marketed by CBRE and Savills.
The two 21-storey buildings, which are expected to fetch about $280 million, have also been circled by US heavyweight Blackrock with Centuria, and Cromwell Property Group.
Chiu declined to comment on whether Shimao was still in pursuit of these two assets, but says the company continues to look for other opportunities, indicating some activity may happen around June.
This article originally appeared on www.theaustralian.com.au/property.
