Banned Yuhu boss still has faith in local property

The local arm of a property empire linked to Huang Xiangmo is close to awarding one of the largest private building contracts on offer in Australia.

The $1.4bn triple-tower Jewel project on the Gold Coast

The Australian arm of a property empire linked to billionaire Chinese developer and political party donor Huang Xiangmo is close to awarding one of the largest private building contracts on offer in Australia.

The moves comes as mainland Chinese property companies maintain an active stance towards new projects even as some deals sour amid political and commercial tensions.

Yuhu, the group behind the $1.4bn triple-tower Jewel project on the Gold Coast, said to be the largest beachfront development in Australia, is expected to hand over a major $100m-plus interior fit-out contract to Brisbane-based Hutchinson Builders.

The parties declined to comment but the contract would help bring the long-running construction of the complex to a close after an at-times fractious relationship between Yuhu and main contractor Multiplex, that saw a work stoppage in late 2018 and half the 900-strong workforce let go.

Their differences were patched up and the exterior of the three- tower development, comprising a hotel and luxury apartments, is being finished by Multiplex, with the project billed as the first absolute beachfront development on the Gold Coast in more than three decades.

The development includes a three-level podium, a five-star hotel with 169 rooms and about 510 one, two, and three-bedroom luxury apartments plus additional residences as well as basement parking for 812 vehicles.

Langham Hospitality Group confirmed in June it would manage the hotel, which is scheduled to open at the end 2021, and the 170 serviced apartments, which were designed to set a new standard for the area.

Other features of Jewel include separate residence and hotel lobbies, five retail shops, swimming pools and private bars.

Mr Huang’s Yuhu Group sold a half share in the Jewel development as well as Sydney’s One Circular Quay project last year for $575m to a China-linked entity known as AW Holding Group, which bills itself as an investment and development company.

Mr Huang, previously chairman of Yuhu, cannot return to Australia following ASIO advice to the federal government that he was a “foreign interference” security risk aligned with Beijing. Separately, the Australian Taxation Office is chasing him over an alleged $141m debt.

Mr Huang is contesting the tax case relating to his dealings in mainland China at a time when he was resident in Australia. Last month, he won an appeal in the Federal Court, overturning parts of a freezing order made in the initial tax case against him.

The Chinese tycoon, who continues to hold substantial assets in mainland China and in Hong Kong, denied any wrongdoing in relation to property or political dealings.

Not all Chinese property players have had a smooth run in Australia.

Mainland-backed developer Risland, formerly known as Country Garden, earlier this year claimed that a dispute that arose when it pulled out of a deal to buy a $300m land parcel in the outer Sydney suburb of Wilton had settled in its favour.

The Chinese firm had been in talks to buy a suburb-sized parcel from local developer Bradcorp last year and later won a court case, before entering negotiations to recoup its $29.7m deposit.

Risland said in documents filed with the corporate regulator that the dispute had settled in its favour and it had received $20.89m back.

Bradcorp said the pair had resolved their issues “consensually without need for further litigation” in March, and Risland forfeited part of its deposit on the site in Sydney’s west.

Bradcorp chief executive Peter Brennan said his company would continue to work on the major project on its own. But Risland remains active in the area and is also co-developing another massive site at Wilton with billionaire Lang Walker after they tied up last December.

Other transactions that have involved Chinese groups appear to be proceeding. China’s Poly Group recently called off talks to buy the Bingara Gorge residential development in Sydney‘s southwest from Lendlease.

But industry players said its Poly Centre project in the Sydney CBD had again attracted a suitor with LaSalle Investment Management the latest to run its eye over a half stake in the development that has an end value of about $500m.

The Chinese developer had previously drawn interest from Keppel Capital and the listed GPT Group and may still go ahead, although the parties and agents JLL and Colliers International declined to comment.

Chinese sovereign wealth fund, the China Investment Corporation, has also swooped on a half-stake in Sydney’s landmark Grosvenor Place property in a deal valuing the entire tower at about $2bn, as international players back the recovery of Australia’s office markets.