The clutch of Chinese billionaires who gathered at Brisbane’s Hilton Hotel yesterday were a world away from the struggles of the residents of the city’s outer suburbs.
But their commitment to pour $6.3 billion into developing about 10,000 apartments in the mini-city of Springfield could help revolutionise both the area and how Australians approach housing affordability.
The deal, struck between Queensland’s Springfield Land Corporation and Hong Kong-listed group R&F Properties and Etone Australia Developments, representing the interests of the deep-pocketed Chinese passive investors, is a remarkable and so far unique long-term play on what will become a new suburb.
“It will be one of the biggest transport-oriented developments in Australia,” Queensland Premier Annastacia Palaszczuk said at yesterday’s signing ceremony, noting the importance of the rail connection to the project.
“Throughout the development of Springfield, the constant emphasis has been on building a thriving, vibrant community.”
The Premier labelled the development “fantastic” from an affordability perspective. “Not everyone can afford a four-bedroom house … and Springfield caters for everyone,” Ms Palaszczuk told The Weekend Australian
At a time when some local developers are shying away from building apartments, the Chinese pair have committed to develop about 20 towers in a broader mixed-use precinct, that will include unique cultural and environmental features, in a project they envisage lasting until 2033.
They will gradually pay development fees to master planner Springfield Land Corporation. R&F will take the lead on the ground and Etone will inject passive capital.
The transaction dwarfs the projects by local developers that are stretched even by smaller CBD projects. It also represents a departure for Chinese groups, including R&F, which are best known for snapping up sites for individual towers, about $3bn worth of which sold in such deals last year.
The unique nature of the deal is in part due to what UBS managing director and head of real estate Australia, Tim Church, who brokered the transaction with colleague Mitchell Schauer, says are the unrepeatable characteristics of Springfield.
Mr Church says Chinese capital is expanding its remit in Australian real estate.
He separates the project from more challenged CBD apartment markets and says part of the success of the transaction was due to its unique characteristics.
The entrepreneur behind the project, Springfield Land Corporation chairman Maha Sinnathamby, is quick to agree, saying the city he created from scratch is now in its 25th year.
It is already a thriving hub with support from local heavyweights such as Lendlease, which has built housing subdivisions, and retirement specialist Aveo.
But the Chinese commitment will take the project to the next level. Its scale and ambition to provide housing in such volume makes it stand out.
The size of the Chinese groups means they can commit long-term to developing product that is affordable but also likely to attract a premium in its area due to its unique surrounds.
“This is going to be transformational for the Ipswich region,” Mr Sinnathamby said.
He wants the city in its existing components to help achieve the goal of one job for every three residents.
“I again affirm our total dedication to enhancing human and social capital,” Mr Sinnathamby said in a nod to the health, education and IT precincts in Springfield that are hitting their straps.
The city has universities, schools and technology companies, all of which occupy real estate that would be attractive to investors, including from China, chasing exposure to this sector.
Li Yang of Etone, James Cui of R&F and Springfield’s Maha Sinnathamby. Picture: Supplied
An artist’s impression of a future central Springfield.
Maha Sinnathamby and Annastacia Palaszczuk on their way to the signing ceremony.