International governments, super funds and global business giants cashing in on Aussie home building boom revealed

October 8, 2024

International property giants and super funds are splashing huge sums buying into Aussie builders and developments as they look to cash in on the nation’s housing crisis.

While the investments from across Japan, South-East Asia, the United States, Canada and United Arab Emirates could bring down home prices and rental costs for Victorians, key building industry figures have warned it could squeeze some companies out of business.

The nation and Victoria’s biggest builder, Metricon, this week revealed it has all but finalised a $115m deal to become 51 per cent owned by Japanese giant Sumitomo Forestry Group.

The Japanese giant is also the owner of Henley Properties Group, Victoria’s seventh-biggest builder, as well as Wisdom Homes in NSW, and the Scott Parker Group in Western Australia.

The series of acquisitions have been underway since 2008 and will end with Australia’s biggest builder being based in Japan, and 12 per cent of Australia’s new homes being built by companies at least partially owned offshore.

The nation’s second biggest builder NXT Group, is already owned by Japanese corporation Asahi Kasei, and has an about 11 per cent stake in Victoria’s fifth largest builder: Simonds Group.

International developers now dominate Melbourne’s city skyline with three of the city’s four tallest towers built by offshore developers, and more on the way.

Capi Ca9eb55150deef6ab89d0c754fe75e96 6d96bf8c6c78b781ac2c6bad1a01808f

Metricon chief executive Brad Duggan announced that his firm was in the midst of being purchased by Sumitomo Forestry.


Prominent housing industry experts believe state and federal housing targets that will add hundreds of thousands of homes to our suburbs are drawing international giants to our housing sector, and that they cannot be reached without significant increases in foreign finance.

Housing Industry Association chief economist Tim Reardon said offshore ownership in Aussie building businesses had increased since the global financial crisis, but more international activity was needed to reach the nation’s housing targets.

“The worst own-goal in the housing crisis is that state governments taxed foreign investors out of the market,” Mr Reardon said.

He noted that increased foreign ownership among big builders could lead to a greater impact from “vertical integration”, or supply chain streamlining, that can help homebuyers with more efficient housing construction.

Capi Ca9eb55150deef6ab89d0c754fe75e96 286afd6f86c9ad73014c3dcce08d066a

Henley Homes was bought out by Sumitomo in 2008, but has remained one of Victoria and Australia’s biggest building groups — and still produces Australian-minded display homes like this Sahara display home in Point Cook.


However, the economist warned it could also result in mid-tier operators who normally build 100-300 homes a year struggling to compete with an increasingly efficient top tier of builders.

Builders Collective of Australia national president Phil Dwyer said adding an international connection to already big building firms would make it harder for mum and dad-level builders to stay in business.

“These bigger companies have buying power for materials that the rest can only ever dream about,” Mr Dwyer said.

“Smaller builders have been struggling to compete for the past decade and now more and more are just getting out altogether.”

International developers are also driving Melbourne’s skyscraper market, with the city’s four tallest towers today including Australia 108, developed by Singapore’s Aspial Corporation, Aurora Melbourne Central, created by UEM Sunrise from Malaysia, as well as the Hong Kong-based Far East Consortium’s West Side Place.

Capi Ca9eb55150deef6ab89d0c754fe75e96 81fcdc28f97728ef49703ff0c1e7fb7c

Malaysian developer UEM Sunrise oversaw the creation of Melbourne’s third-tallest tower: Aurora Melbourne Central.


The city’s future tallest skyscraper, STH BNK by Beulah, is being developed by historically Malaysia-linked, but Melbourne-based Beulah.

Co-founded by Adelene Teh, the daughter of Malaysian development industry giant Dato Teh who headed IJM Corporation Berhard, its past projects have attracted significant investment from Malaysia-based buyers.

While the STH BNK by Beulah site has significant funding from Australia’s biggest bank, the CBA, a number of its ritzy homes have sold to offshore buyers, including a $38m apartment that set Melbourne’s apartment price record early last year.

Meanwhile, one of the city’s biggest active development sites, the $2.8bn Melbourne Square project in Southbank, is being created by OSK — a Malaysian firm headed by Ong Leong Huat, one of that nation’s 50 richest people.

And the city’s surging build-to-rent market is also being heavily funded by internationals hoping to cash in on the rising number of tenants expecting to lease a home long term.

The world’s biggest commercial property owner American-giant Blackstone owns the 437-apartment Caulfield Village complex, while Canadian pension fund-owned Oxford Properties have backed a now partially built $180m tenants-only Southbank development by local developer PDG.

Other international groups buying into Melbourne’s build-to-rent market include Singapore’s sovereign wealth fund, GIC, as well as American-based Sentinel Real Estate and the Abu Dhabi Investment Authority which invests for the United Arab Emirates city’s government.

Capi Ca9eb55150deef6ab89d0c754fe75e96 8d1fff1b32b6603dae5c57f23577b338

Caulfield Realm, the newly constructed retail precinct below Caulfield Village is set beneath a 437 built-to-rent apartment complex owned by American giant Blackstone.


Charter Keck Cramer research national executive director Richard Temlett said an Australian goal of building 1.2 million homes over the coming five years and the Victorian government’s gazetted 800,000 new homes in a decade plan were “strong pull factors” for these groups.

“Australia is a very attractive country, and they (foreign firms) have a very important role to play — we need that international capital, and it needs to be embraced,” Mr Temlett said.

Global giants cashing in on Aussie building boom

Sumitomo Forestry

Japan

Company value by shares: $13.727bn (AUD)

In the midst of $115m bid to buy 51 per cent of Metricon

Bought controlling share Henley Homes (Vic), 2009

Bought controlling share Wisdom Homes (NSW), 2016

Bought controlling share Scott Park Group (WA), 2020

Increased ownership of Henley Homes (Vic), 2020

Asahi Kasei Group

Japan

Company value by shares: $14.89bn

Bought NXT Building Group, NSW’s biggest builder, 2021

Bought Arden Homes (via NXT), 2023

Owns 10.8% of Simonds Group via shares, 2024

Daiwa House

Japan

Company value by shares: $29.847bn

Acquires majority stake in Melbourne Quarter build-to-rent project for $650m, 2023

Bought Rawson Group (NSW), 2017

Blackstone

America

Company value by shares: $184.68bn

Built Caulfield Village (Melbourne) build-to-rent complex, 2022

Purchased Kangaroo Point (Brisbane) build-to-rent complex, 2021

GIC

Singapore – sovereign wealth fund

Estimated value: $770bn

Backs build-to-rent firm Home, with sites in Richmond, Southbank and more coming

Also backed Gurner development firm with $400m in 2022

Abu Dhabi Investment Authority (ADIA)

United Arab Emirates – government investor

Estimated value: $1.5bn

Backs Qualitas property investment funds, which has partnered with Melbourne developer Gurner on build-to-rent projects across Australia.

 

Source: realestate.com.au

You might be also interested in

Gettyimages 950974992
Why are interest rates not going down in Australia?
A 50-basis point interest rate cut for New Zealand last week has sparked renewed questioning of the Reserve Bank of Australia’s flight path, as the country prepares to hit one
VIEW POST
5699b31aac992df42a6301cae08e4d8b 1600x1080
Making sense of housing policy proposals
With a wave of housing policy proposals hitting headlines, CoreLogic’s Head of Research Eliza Owen breaks down what these announcements could mean for the market and how effective they might
VIEW POST
Screenshot 2024 10 21 065602
Stamp duty slashed on units, apartments – but you’ll have to get in quick
Stamp duty will be slashed for all off-the-plan units, townhouses and apartments starting today under a 12-month stimulus plan by the Allan government to encourage denser developments and save buyers
VIEW POST
Central Business District Condo Investing 11zon
What Can You Buy for less than $1 Million in Melbourne’s Inner Suburbs?
Melbourne’s property market offers diverse opportunities for buyers with a budget of under $1 million. While houses may be out of reach in certain areas, a range of well-located apartments
VIEW POST
41 Battle Boulevard Seaforth 1
‘Wouldn’t hesitate’: What’s behind the biggest pre-spring city real estate rush in over a decade
Homebuyers will have plenty of fresh properties to inspect this spring, as new listings in Australia’s capital cities reached their highest levels for August in more than a decade.   Capital
VIEW POST
45fdd9c6f3351cdc015447975ce17892
The surprising change facing new units in Australia
Typically, units cost less than houses and can provide a more affordable entry point into property ownership compared to houses for many homebuyers. Ten years ago, the median price of a
VIEW POST
Gettyimages 2007503834
How many Victorian investors have sold due to higher land taxes?
Changes to land tax thresholds in 2024 increased costs significantly for investors in Victoria, but how many of them have responded by selling their rental properties? Analysis comparing the number
VIEW POST
111 1600x1080
Neighbourhood Guide – Footscray
Melbourne is home to several neighbourhoods with impressive transformations, and Footscray is one of the most remarkable examples. Once known as a working-class area with a rough reputation, it has
VIEW POST
Undefined 300x158 1600x1080
Investors borrowing rises 35.4%
Property investors committed to $11.71 billion of home loans in July 2024, which was the second-highest month on record, according to the Australian Bureau of Statistics. It was also 35.4%
VIEW POST
845ddd5655ce6af21d5deeee1b9a3c97 1600x1080
Growth cools in Australian housing values through winter as Melbourne median slips below Perth and Adelaide
National home values increased 0.5% in the month of August, the 19th consecutive month of increase in home values. However, the pace of growth is showing clear signs of slowing. National home
VIEW POST

Get your Free Property Guide.

Here goes your text ... Select any part of your text to access the formatting toolbar.

Get your free Sales Report for International governments, super funds and global business giants cashing in on Aussie home building boom revealed

Get your free Sales Report for International governments, super funds and global business giants cashing in on Aussie home building boom revealed

Subscribe to hear the latest

Start The Conversation Today.

Call us on:

1300 850 730

Request a Callback:

Send us a Message:

Privacy Policy

Get your Free Property Guide

Get your free Suburb Report for International governments, super funds and global business giants cashing in on Aussie home building boom revealed

Get your Free PDF copy of Make Money Simple Again

Privacy Policy

Who we are

Suggested text: Our website address is: https://motionproperty.com.au.

Comments

Suggested text: When visitors leave comments on the site we collect the data shown in the comments form, and also the visitor’s IP address and browser user agent string to help spam detection.

An anonymized string created from your email address (also called a hash) may be provided to the Gravatar service to see if you are using it. The Gravatar service privacy policy is available here: https://automattic.com/privacy/. After approval of your comment, your profile picture is visible to the public in the context of your comment.

Media

Suggested text: If you upload images to the website, you should avoid uploading images with embedded location data (EXIF GPS) included. Visitors to the website can download and extract any location data from images on the website.

Cookies

Suggested text: If you leave a comment on our site you may opt-in to saving your name, email address and website in cookies. These are for your convenience so that you do not have to fill in your details again when you leave another comment. These cookies will last for one year.

If you visit our login page, we will set a temporary cookie to determine if your browser accepts cookies. This cookie contains no personal data and is discarded when you close your browser.

When you log in, we will also set up several cookies to save your login information and your screen display choices. Login cookies last for two days, and screen options cookies last for a year. If you select “Remember Me”, your login will persist for two weeks. If you log out of your account, the login cookies will be removed.

If you edit or publish an article, an additional cookie will be saved in your browser. This cookie includes no personal data and simply indicates the post ID of the article you just edited. It expires after 1 day.

Embedded content from other websites

Suggested text: Articles on this site may include embedded content (e.g. videos, images, articles, etc.). Embedded content from other websites behaves in the exact same way as if the visitor has visited the other website.

These websites may collect data about you, use cookies, embed additional third-party tracking, and monitor your interaction with that embedded content, including tracking your interaction with the embedded content if you have an account and are logged in to that website.

Who we share your data with

Suggested text: If you request a password reset, your IP address will be included in the reset email.

How long we retain your data

Suggested text: If you leave a comment, the comment and its metadata are retained indefinitely. This is so we can recognize and approve any follow-up comments automatically instead of holding them in a moderation queue.

For users that register on our website (if any), we also store the personal information they provide in their user profile. All users can see, edit, or delete their personal information at any time (except they cannot change their username). Website administrators can also see and edit that information.

What rights you have over your data

Suggested text: If you have an account on this site, or have left comments, you can request to receive an exported file of the personal data we hold about you, including any data you have provided to us. You can also request that we erase any personal data we hold about you. This does not include any data we are obliged to keep for administrative, legal, or security purposes.

Where your data is sent

Suggested text: Visitor comments may be checked through an automated spam detection service.