Australian institutions will soon have access to high-end Chinese residential property, following a deal between AXA Real Estate Investment Managers and China’s Ping An Trust.
Axa REIM and Ping An Trust signed an MOU to co-invest in developing mid to high end residential projects, with a view to launching a dedicated Chinese real estate fund which AXA Investment Managers’ Australian director, Craig Hurt, said in time would become available here.
Frank Khoo, who was hired by AXA REIM last year to lead its Asian business, said:
"We like the middle to upper class residential space because of the economics driving it –
increasingly better pricing opportunities and there is still such a big urbanization story going
Khoo listed China’s young and growing population, rising incomes, current low mortgage
penetration rates and the attractiveness of investing in a sector that is "self-financing and
self-liquidating" as key drivers for the business opportunity.
He added that unlike investing in affordable housing, the middle class realm allowed for more innovative designs to be incorporated in developments. "In terms of the lower end of the spectrum, I do not think we
can add value there, it is all down to price and margins are too thin", he said.