Chinese investors bullish on Australia’s tourism/hospitality assets

June 30, 2016

The opening of Pullman Sydney Airport marks a new phase in China’s strong investment interest in Australian tourism real estate. While projects such as the 5-star Primus in the Sydney CBD highlight their appetite for trophy hotels, the purchase by the Nanshan Group of the $84 million Pullman Sydney Airport shows that the interest extends to hotels in suburban areas. Nanshan followed that up with a 20 per cent stake in Virgin Australia, cementing their interest in Australia’s tourism sector. They were then joined by another Chinese company, HNA Aviation Group, who took a 13 per cent (AUD$159 million) stake in Virgin Australia.

According to a report on the growth of Chinese investment in Australia by JLL Hotels’ Peter Harper: “Chinese investors have picked up some the cream of Australia’s hotel crop in the past few years, including Sunrise’s $463 million purchase of Sydney’s Sheraton on the Park, joint venture Far East Land & Sino Land Company’s purchase of Westin Sydney for $445 million, followed closely by Bright Ruby’s purchase of Hilton Sydney for $442 million. Chinese investors also acquired Ribbon Darling Harbour and transformed the former Sydney Metropolitan Water Sewerage and Drainage Board HQ in Pitt Street, Sydney into the five-star Primus Hotel.

 “While these acquisitions demonstrated the Chinese appetite for buying premium ‘trophy’ assets in CBD locations, the purchase of the Adina Mascot, Clarion on Canterbury and Pullman Sydney Airport also reflects a willingness to invest in emerging commercial districts.”

The Chinese investment interest comes on the back of record inbound flows by Chinese travellers into Australia. There are now over one million Chinese tourists – an increase of over 19 per cent on the year to April 2016 (and up from just 350,000 in 2009) – and Chinese tourists now account for 23 per cent of total expenditure (over $7 billion) by overseas visitors.