Growing uncertainty around state-backed policy changes in China has stalled property deals worth at least $40m in the Gold Coast, with many nervous China-backed groups leaving the negotiating table altogether.
On August 18, Beijing issued the first set of rules on overseas investment by Chinese companies. The new list of banned investments includes casinos and defence technology, while overseas property development, film production, theme parks, and hotels were classified as “heavily restricted”.
Mark Witheriff, joint managing director at Knight Frank Gold Coast Australia, said he knows of at least two major deals, worth about $40m together, that have fallen through after Chinese interests withdrew from the negotiations.
“I suspect there will be a slowdown until people see the lie of the land in terms of property,” he said. “There is still interest from Chinese groups but they may not be as bullish as they were.”
Witheriff said the east coast capitals were likely to be harder hit than the Gold Coast. “The Coast is still relatively cheap and there is still significant interest from Australian groups and from Southeast Asia – Singapore and Malaysia,” he added.
The policy changes would be the final nail in the coffin for the ASF Group’s integrated resort and casino development on the northern Gold Coast Spit. Last month, the Queensland government pulled the plug on the planned casino resort, which would have included corporate facilities, a hotel, and restaurants.
Four years ago, the ASF Group won the exclusive right to negotiate with the Queensland government for a Gold Coast casino license.
A representative for the Palaszczuk government said it would refund “all monies lodged with the state”. This does not include the significant financial investment that was channelled into developing the project. According to The Australian, the ASF Group has spent approximately $30m on planning, design, and other consultancy work to progress the development proposal.
The policy changes have capped off a difficult August for the ASX-listed group, whose $3.5bn casino plan at the Spit was repudiated a fortnight before it lost a multibillion-dollar bid to develop a major site at London’s Royal Docks.
Dalian Wanda Group, a partner in the Gold Coast’s Jewel development, offloaded hotels and theme parks worth $12bn in July, and backed out of a $760m land lead in London in August following Beijing’s crackdown on “irrational overseas investment”.
In July, Dalian transferred its 60% share of the Jewel project from one of its Hong-Kong listed companies to its China-based Dalian Wanda Commercial, which is majority-owned by billionaire Wang Jianlin and his family.
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