Back to Insights

January 8, 2018

A new perspective on China

There are still plenty of opportunities in Australia for Chinese developers and buyers. But with the Chinese government tightening capital outflow, it’s not so easy for investors and developers to move their money out of the country.

That’s why Stamford Capital is proactively expanding its services to the Asian market. Having recently joined Stamford Capital as Head of Asian Business, I’m thrilled to take on this new challenge. I’ve worked in corporate and commercial banking throughout China and in Australia for over 25 years – and in this current climate, there’s never been a better time to strengthen our property and financial relationships.

Right market, right product

Many Chinese developers and property owners are successfully leveraging their home market with ideal Australian property opportunities. They know they need an in-depth understanding of the investment environment in Australia – from agriculture and mining to real estate.
It’s essential to get your valuations right, and be prepared to pay the right price for a project. You also need to be aware of the latest regulations and industry-specific practices, as well as cultural and language differences. And to do all this, it’s essential to have the right team in Australia, managing the project from end-to-end on your behalf.

New sources of funding

One of the biggest hurdles we help Asian developers and investors with is capital. For those who are new-to-bank here in Australia, obtaining funding for projects (particularly in construction finance) is increasingly challenging.

Even if you have enormous standing in China’s financial markets, this does not translate to easy bank finance access in Australia. And with APRA forcing domestic banks to cut down their exposure to China, Chinese investors and developers may need to start to look at alternative sources, such as non-bank funding.

How can we help

My role is to connect Asian developers and investors with Stamford Capital’s expertise and network of trusted existing partners. We’re providing funding advice and solutions tailored to the needs of Chinese developers and investors, and have already helped several Chinese clients realise significant deals through non-bank funding – overcoming significant roadblocks to their investment. This includes land finance worth A$135million, construction finance worth A$100million and two land deals worth $20million each.

Our local clients can also benefit from our diverse and trusted Asian networks, with introductions to equity partners. To kick this off, Dom and I will be running a road show in January in Hong Kong, Singapore and Shanghai to introduce Stamford Capital to our counterparts in Asia – look out for our report once we’re back.

Tips for cross-cultural partnerships

Whether you’re in Asia or Australia, here are a few things to consider – tips I have learned from experience.

Look further than the buyer profile. Understand who the true decision maker is, and their level of knowledge.
Allow sufficient time for the approval process – two different cultures mean different holiday periods, and Australia’s Christmas and New Year does not align with Chinese New Year.
Translation is more than just word to word. You need to get the context and expression right, so that each party is fully understood.
Understand the changing appetite of Chinese investors. For example, they no longer seek to own 100% of every investment.
This is an exciting time for Stamford Capital as we expand into new markets. I look forward to deepening our relationships with current clients and sourcing new opportunities for both investors and developers.

Please get in touch if you’d like to chat: