Sweet deal for Darrell Lea chocolate factory
Chinese-backed developer JQZ has bought the former factory site of confectionary company Darrell Lea in Sydney’s south for an estimated $80 million, with plans to turn it into a “mixed-use” residential community involving the construction of 550 apartments.
It is the second purchase for the developer this month, following the acquisition of a large apartment and retail site in Sydney’s Macquarie Park for about $200 million, announced in mid-September.
The development of the 3.3ha Darrell Lea site in Kogarah will include the construction of 550 apartments across four residential buildings and 18 townhouses, with development by the company’s in-house construction service slated to begin in January next year.
Director and founder of JQZ, Jianqiu Zhang, says the site has been identified as a “strategic centre” by the NSW government due to its proximity to Kogarah, where a major renovation of St George’s Bank head office is likely to result in 3000 jobs on site.
It will be targeted as an investment opportunity for first-home buyers, families, local downsizers and savvy investors, according to the company.
Sydney-based residential developer JQZ was established in 2010 under the name Tong Group, and has emerged as a significant player in the building of apartments in Macquarie Park, one of the city’s largest employment hubs and a key growth area.
The most recent report from the Foreign Investment Review Board reveals Chinese buyers account for the vast bulk of foreign investment in Australia’s property market, overwhelmingly in new apartments.
It will be targeted as an investment opportunity for first-home buyers, families, local downsizers and savvy investors
About two-thirds of the $61 billion in applications during the last financial year came from Chinese nationals.
Qiu Zhang told The Australian earlier this is month that foreign developers, particularly from China, had paid too much for development sites in speculative acquisitions over the past few years, with pressure mounting to sell the properties.
He says he has been approached several times by developers who are trying to sell their sites.
“Many of them don’t have the local know-how, especially any idea about related market risks. They were too rash in making those acquisitions and they paid too much,” Zhang says.
“I have been approached by at least seven or eight projects. If they can’t sell, those projects can’t start either.”
The company is building 2000 apartments and has plans for another 3000.
Its largest development is Grand Central in Homebush, on Parramatta Rd near Sydney Olympic Park, which will contain 430 apartments and 1800sqm of retail.
The Darrell Lea site was acquired from a Lea family company, Land & Portfolio.
It sits on Rocky Point Road, about 15km south of the Sydney central business district and 5km from the airport.
This article originally appeared on www.theaustralian.com.au/property.
