Macau investors eye Aussie real estate

Investors are opting to put their money into Australian real estate over reinvesting it in their Macau-based businesses.

That’s according to news website Financial Review, which found that cash-rich individuals from the SAR prefer to invest in property in Hong Kong, Singapore, London and the Australian Gold Coast, among other areas.

Colliers International’s Vince Kernahan who recently sold a prized office tower in Sydney’s Chinatown to an Adelaide-based – and China-backed – firm, said that Macau investors are increasingly looking toward Australian real estate as an investment vehicle.

“We have seen a rise in Macau investors since June last year […] buyers from Macau and Hong Kong are now looking at Australia while previously they were looking at London,” Kernahan told Financial Review, adding that the number one preference was commercial properties with a strong holding income.

The news website speculated that Macau casino developers see little benefit to reinvesting in their businesses, especially given a recent reduction to the number of days granted to a Chinese transit visa, as well as the possibility of a resurgence of the mainland’s anti-corruption campaign in the future, which might once again deter the high-rollers only beginning to return.

Instead they are looking for passive assets for income and capital growth.

“Previously there was so much money coming in from China to Macau but the casino industry realized with the Chinese government prohibitive on casino visits, their business may suffer,” Colliers International’s Asia Markets expert Steam Leung said, as cited by Financial Review.

“They would normally re-invest profits in their businesses, but now with a potential crimp to growth, they would rather put it in buildings in Singapore, London and now Australia.”

Another reason that Australia has become such an attractive country for real estate investment is down to fluctuations in the foreign exchange rate. This provides an opportunity for investors in a way that investments into Hong Kong and the U.S. cannot.