Chinese developer has full confidence in the housing market


Chinese-backed local developer, once known as Zhengtang, is the namesake for its Chinese backer, a little-known Hubei developer in China.

The company beat everyone to buy the $730 million high-profile Darling Harbour hotel project, "The Ribbon" and Australia's largest hotel transaction.

"We are always looking but we do not chase a project. And when we look for good projects, we will look for everything, offices, retail and residential," Mr Teng said.

"Our business is quite diversified. We have talented teams in hotels and commercial development."

"It is very hard to say we will just focus on hotel, but we will seize every opportunity."

But hotel projects hold a great interest for the company because as Mr Teng says "they are good because they are rare, and everything that's rare is good".

The company will also stay true to its grassroots, residential development, and does worry about an overheated apartment market or apartment settlement issues.

"Whatever the market is, it is reasonable," Mr Teng said.

"The market is transparent and buyers have all the information to make whatever choice that is reasonable."

The developer does not rely on overseas buyers as there is enough demand local buyers for its products. Less than 20 per cent of its apartments are sold to foreigners, Mr Teng said.

"I believe some areas may have an oversupply of apartments, not overall, maybe some in Melbourne and some in Brisbane," Mr Teng said.

"We are confident the banks will keep doing business, they will lend money to someone."

"Our projects will be good enough to get support from the market and from the banks, with funding."

Soon the company will move onto St Leonards, another burgeoning residential growth centre.

As for funding, the company has locked in a relationship with local major bank and does not worry development capital drying up.

"We have a good ratio of equity and debt [in our projects] and we are confident about the growth of the business. We have very good balance."

Mr Teng's confidence is backed by a good track record so far.

Source: Financial Review


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