Chinese developer Poly pulls plug on multiple projects
One of China’s most voracious property developers, Poly Global, is selling off multiple assets across Sydney and Melbourne amid underlying tensions between Canberra and Beijing and a real estate rout in China.
The state-owned developer is quietly listing its landmark $300 million office project at 1000 La Trobe Street and offloading three major development sites in Sydney and Melbourne, a substantial part of its future growth portfolio.
Poly Australia is the subsidiary of Shanghai-listed real estate developer Poly Global. A major shareholder is state-owned China Poly Group Corporation, widely believed to be linked to the People’s Liberation Army and one of Beijing’s most powerful and opaque businesses.
Along with real estate, the Poly conglomerate has sprawling interests in arms manufacture and sales, construction, resource extraction, fishing and entertainment.
Poly Global appears to be unscathed by the real estate malaise and spiralling debt crisis that is threatening other large Chinese property titans like Evergrande and Shimao Group.
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The prime development sites its Australian offshoot is selling include: a permit-approved block in Sydney’s Wentworthville with plans for 523 apartments, a 3531 square metre site on Melbourne’s Bridge Road with approval for a six-level office, and a landmark corner freehold in Box Hill with permits for a 36-level residential tower.
Combined, they are likely to fetch around $120 million.
The sale of the Australian holdings are being handled by Colliers International, Knight Frank and Savills.
Poly Group said it was selling assets that didn’t fit with its development vision and that it remained “strongly committed” to Australia.
“Our future focus will be on commercial office asset management and low-density residential developments in Sydney, where we have traditionally enjoyed great success,” a spokeswoman said.
Two years ago, Poly Australia abruptly abandoned a $300 million land deal in the final stages of negotiations with Lendlease that would have given it a substantial share of the property giant’s 200-hectare Bingara Gorge residential development and golf course in Sydney’s south-west.
The deal, if sealed, would have been the culmination of a multi-million dollar buying spree that began in 2015 with its first property purchase in Melbourne which was quickly followed by a site in Epping, in Sydney’s northern suburbs, and a year later reached Sydney’s skyscraper heartland where it swooped on two neighbouring buildings at 210-220 George Street next to Mirvac’s EY Tower.
It is also developing the Ascot Aurora housing estate in Brisbane.
Foreign Investment Review Board approvals for Chinese companies buying into Australia have dwindled.
More recently, the developer appears to have tempered its appetite for acquisitions and not signalled any new projects, instead pushing towards finishing buildings already under construction.
Poly’s spokeswoman said the company was actively looking for new investments and will retain ownership of the George Street office tower it is putting the finishing touches to.
Completion of its flagship 107-metre tall Grimshaw-designed Poly Centre tower near Circular Quay has been pushed out from the end of 2021 until June this year. Leasing of the building is under way.
Poly tried to offload a $500 million half share in both the George Street Sydney tower and its Melbourne La Trobe Street commercial building halfway through 2020, but was hampered by uncertainty surrounding the pandemic.
Foreign Investment Review Board approvals for Chinese companies buying into Australia have dwindled since the federal government decided in 2020 every foreign acquisition must be screened.
Department store Myer, the Melbourne tower’s main tenant, moved into its new headquarters earlier this year, taking three floors in the building.
Work on the developer’s Lily Garden project at 171 Buckingham Street in Richmond, which stalled during the pandemic, has since restarted.
