Chinese ready for $12bn buy spree

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It's a another convincing move my developers in down under to push property sales. Everyone seems to be playing musical chairs now

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Tasmania buy-up: China on investment spree
THE AUSTRALIAN NOVEMBER 15, 2014 12:00AM

Sue Neales

Reporter - Rural/Regional Affairs
Matthew Denholm

Tasmania Correspondent
Hobart

AUSTRALIA’S smallest state is set to reap the benefits of a multi-billion-dollar landslide of Chinese investment in its agricultural sector, under deals to be sealed when Chinese President Xi Jinping flies to Hobart next week.

It is understood that at least four major investment agreements will be signed and announced while Mr Xi is in Tasmania for a five-hour visit on Tuesday, including a special deal between the state government and a major Chinese investment bank to inject much-needed funds into the state’s expanding dairy, fruit and aquaculture industries.

Deputy Premier and Agriculture Minister Jeremy Rockliff said last night that deals were imminent and Chinese investors wanted to buy “investor-ready” land and water farm packages.

He said the Chinese investment funds from state-owned companies and banks would be used to convert and develop lower-value sheep and cattle farms into more intensive dairy farms, with irrigation infrastructure and by building new dairies.

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“Negotiations are still being worked through but we have water and land for sale, we encourage Chinese investment and we need to increase our milk production from 800 million litres to two billion litres in just a few years,” Mr Rockliff said.

The Tasmanian fruit industry will also be the beneficiary of Mr Xi’s visit to the Apple Isle, with the expected signing of a landmark memorandum of understanding for a China-Tasmania fruit industry partnership program.

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Tasmania will more than double its horticultural production over the next five years. The remarkable growth — to meet the burgeoning out-of-season demand from China, Taiwan and other Asian countries — has been driven by individuals such as fourth-generation Tasmanian orch­ardist Howard Hansen, who has pioneered access to Chinese markets for cherries and apples over the past two years.

“Hansen orchards planted more trees this last winter — 25,000 apple trees or about 8 ha of land — than at any time in the past,” Mr Hansen said.

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His rapid expansion has allowed him to supply 50 per cent of all Tasmanian cherry exports to China from his Huon Valley orchard at Gove.

Exporters such as Mr Hansen use air freight to get their produce to Chinese tables within days, providing an edge over their main competitor, Chile.

However, currently, all exported fresh foods such as fruit and seafood have to be flown via Melbourne or Brisbane airports because Hobart’s runway is too short for international access.

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“It’s expensive but it allows us to get our cherries to market less than 48 hours after they are picked from the trees, compared to the Chilean product, which is closer to 48 days sent by sea,” Mr Hansen said. “Are the Chinese going to pay a premium for that fresh product?

“That’s the million-dollar question, but the past 18 months (of exports) have been encouraging.”

Tasmania is well regarded in China and Taiwan, gaining access to markets denied to mainland growers because of its disease-free status and prized branding.

The Weekend Australian understands that other deals to be announced may include the part sale of Tasmania’s biggest dairy farming business, the Van Diemen’s Land company, to state-owned Chinese interests, along with a package of 20-30 other northwestern dairy farms.

The new Chinese investor in NZ-owned VDL, which owns 28 dairy farms and milks 30,000 cows, is also apparently keen to build wind turbines on VDL’s massive Woolnorth property on Tasmania’s northwest tip to meet China’s increased clean energy commitments.

There are already two wind farms on Woolnorth on land compulsorily acquired by the Tasman­ian government from VDL in 2000, near Cape Grim and facing the Roaring 40s .

The 37 wind turbines at Bluff Point and 25 towers at Studland Bay are now 75 per cent-owned by China’s Shenhua Clean Energy Holding Pty Ltd, itself majority owned by the government’s Guohua Energy Investment company, after Hydro Tasmania sold its ownership down in 2012 for $88.6 million.

VDL managing director Trevor Westacott denied there would be any announcement on Tuesday concerning the imminent sale of all or part of VDL, linked to the Chinese President’s visit.

The use of an extended Hobart airport runway and Hobart Port as a new base for Chinese ships serving China’s Antarctic base is also expected to be announced.

Direct international flights between China and Tasmania bringing Chinese tourists into Hobart and flying fresh produce out are also in the wind, once the federal government-funded upgrade of the runway is completed.

Mr Rockliff said it was also possible a new trade in fresh milk from Tasmania to China, flown out of Hobart airport, would begin, to take advantage of the astounding $10-a-litre prices for fresh Australian milk being paid by wealthy Chinese in Beijing and Shanghai.

About 17 per cent of Tasmania’s agricultural and seafood exports — which include meat, abalone, oysters, crayfish, dairy, fruit, berries, nuts and vegetables — were sold last year to China, with it fast overtaking Japan as the largest buyer of Tasmania’s “clean, green” agricultural produce.

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Chinese eye farmland to broaden their horizons
THE AUSTRALIAN DECEMBER 01, 2014 12:00AM

Greg Brown

Property Reporter
Sydney

Sherwood Luo says Greenland diversification has always been part of strategy. Picture: Renee Nowytarger Source: News Corp Australia
CHINESE property developers are charging into Australian agriculture in a bid to limit their exposure to the residential property market.

Chinese-backed property groups Greenland Holding Group, Country Garden, Harman Global, Evergrande Group and Hailiang Group are among the companies running the ruler over agricultural sites.

Greenland Australia managing director Sherwood Luo said Chinese companies had a wide spread of investments in their domestic market.

“Greenland itself is a diversified business. It is not only property development, but also in mining, finance and many other sectors. This has always been the company’s strategy,” Mr Luo said.

Greenland has invested $1.6 billion in Australian property projects — mostly residential — and the group this month announced that it aimed to become a player in beef, dairy and agriculture. The company is understood to be negotiating on major agricultural properties and aims to export products to the burgeoning Chinese middle class. Mr Luo said the free-trade agreement between Australia and China — which reduced most tariffs on agricultural products — would lead to more investment.

CBRE agribusiness regional director Danny Thomas said there had been a surge of inquiries for agricultural property from the Chinese mainland in the past six months.

Mr Thomas said Chinese development groups had experienced huge growth in the past two decades due to the nation’s urbanisation, which required the construction of a vast number of new apartments.

Now that the Chinese residential market was slowing, property developers were expanding into agriculture as it was viewed as a growth sector, Mr Thomas said.

“Agriculture is a very logical translation (for Chinese development companies),” he said. “They see it as a natural area of growth for them to capitalise on the emerging middle class in their country. They have massive market power because of the strong growth they’ve experienced over the past decade and they are now able to leverage that into an area that they see as having very strong growth fundamentals for the next decade.”

Mr Thomas said poultry assets would not be popular with the Chinese as the produce was readily available in China.

“But if its something expensive like beef or dairy, they will be ­focused very much on those ­assets,” he said.

Ethan He, chief executive of Chinese-backed residential developer Harman Global, said the group aimed to enter the local agricultural market. “We are considering it because Australian agriculture is a great opportunity for Chinese companies; we want to divert the risk (of too much exposure to the residential market),” Mr He said.

“A lot of Chinese businessmen are looking to get into Australian agriculture and we think it would lead to more investment (into our company).”