Chinese developers retreat as Han’s Holding sells off $3bn skyscraper site

Many of the biggest offshore developers that swept into the market in a decade ago have left without realising their dreams of expanding in Australia.

An artist's impression of Han’s Holdings’ design for the 338 Pitt St site.

The exit of Chinese developers from large Australian property developments is picking up pace, with offshore company Han’s Holdings Group selling a site it had assembled overlooking Sydney’s Hyde Park for a $3bn p­roject.

The private group has quietly dumped plans for a dramatic 80-storey twin-tower scheme in the mid-town precinct of Sydney’s central business district and sold the site to local developer Billbergia in an off-market deal.

The sale of the 338 Pitt St site for an estimated price of more than $500m ends a decade-long quest by overseas groups to put together a property where twin apartment skyscrapers comparable in style to New York’s World Trade Center could be developed.

The Han’s Holdings site spans much of an entire city block.

The sale comes after the Chinese group signalled its exit by testing the market back in 2021. Rising interest rates hit commercial property transactions and made deal-making tough at the time, but the market is now gradually unlocking.

The low-profile Billbergia is one of Sydney’s largest development players. It will add the site to its existing multibillion-dollar pipeline of projects across Sydney’s suburbs, with the move on the CBD site putting it among the top ranks of developers.

The deal highlights the ending of the Chinese development boom, which underpinned the dramatic growth in apartment production in the last decade. Chinese groups poured into the market but many have since exited Australia as their development dreams soured, China’s own property market went into reverse and geopolitical tensions between the countries worsened.

At the same time, locally listed groups have been relatively constrained in their buying, leaving private companies to snap up many of the largest development prizes across the suburbs of Sydney and Melbourne.

However, some listed players have capitalised on the Chinese exit. Lendlease teamed with Japan’s Mitsubishi Estate Asia to buy the site of its One Circular Quay project, which is now under construction, from Chinese-backed group AWH for $850m in 2022. It is now building a $3bn-plus luxury apartment and hotel project.

Others to sell down their holding significantly include China-backed Greenland, which sold off a city hotel and a major suburban development site. Another state-backed group, Poly, looked to offload commercial projects in Sydney and Melbourne, though it has kept a local presence.

High-profile Chinese developer Country Garden, which operated under the name Risland locally, sold a huge Melbourne housing estate project at a and then followed suit in Sydney by selling a stake in a $2bn housing estate.

The groups that started out in China and remain invested have embedded themselves locally and taken on longer-term projects. Notable players in this category include Aqualand, which is developing the Central Barangaroo precinct on Sydney Harbour, and has about a dozen properties.

The exits come amid a tough business climate between the countries.

Beijing is discouraging Chinese developers from undertaking luxury projects in offshore markets amid their own unsolved debt woes and many potential apartment buyers have difficulties in getting money out of China.

These factors have created a situation where local private developers can seize very large projects while others are hamstrung. Billbergia’s capabilities have been put on display with its dramatic redevelopment of Sydney’s waterside suburb of Rhodes.

It is also part of a group of landholders that have proposed a $25bn revamp of an industrial precinct in the western suburb of Camellia. While moving into the CBD is a step up for Billbergia, it has also built one of North Sydney’s tallest towers, which includes both offices and a hotel.

Billbergia declined to comment on whether it would pursue the original vision put forward by the Chinese developer, whose local operation was uncontactable. Under the original scheme, the towers were to be connected by a sky bridge at levels 36 and 38, further marking them out on the city skyline, as they will already be among the city’s tallest.

The design competition for 338 Pitt St saw FJMT, Polly Harbison, Trias and Aileen Sage selected to advise on the towers, which are to top the James Packer-inspired Crown Residences of One Barangaroo by five stories.

The site is in one of the city’s last major undeveloped areas.

The scheme would transform the site on the corner of Pitt St and Liverpool St. The striking towers would include 592 opulent luxury apartments, a 158-room five-star hotel, and 5000sq m of space for top retailers.

Han’s Holdings is one of the largest private Chinese developers and has projects across global capitals. Founded in 1996, it is headquartered in Nanshan district in the Chinese city of Shenzhen, and has become a major commercial and residential property development group.

The Han’s Holdings family office also has locations in Hong Kong, New York and Lucerne. It has undertaken large-scale urban renewal, office towers, retail centres, high-end hotels and residential projects.