Mirvac Group announced yesterday that it has entered into its second joint venture development with Ping An Real Estate, a subsidiary of Ping An Insurance Group of China, for an interest in St Leonards Square, a residential development located at 472-486 Pacific Highway, St Leonards in Sydney.
The transaction follows Mirvac’s announcement in December last year that it had entered into a strategic development joint venture with Ping An to develop residential projects in key Australian cities. The Finery in Sydney’s Waterloo was its seed project.
“We are thrilled to have expanded our partnership with Ping An to develop a flagship residential development on Sydney’s lower north shore,” Mirvac CEO and managing director Susan Lloyd-Hurwitz said.
“Our proven capability to create quality residential product provides a solid platform to further leverage our relationship with Ping An over the long term, and to grow this part of the business in a capital-efficient manner,” she said.
“Having now entered into two residential development joint ventures with a high-calibre organisation such as Ping An demonstrates our ability to work in partnership with third-party capital to deliver the objectives of both parties.”
Ping An CEO Andrew Zhou said the group is excited to be expanding into another key residential market in Sydney and remains confident in the long-term fundamentals of the Australian real estate market.
The St Leonards Square project is a high-rise development of one-, two- and three-bedroom luxury apartments.
The announcement comes as fears of an oversupply of apartments, coupled with instances of mortgage fraud, have led a number of Australian lenders to stop lending to certain pockets of the market.
In addition, the Housing Industry Association (HIA) this week reported that new home sales have passed their peak for the cycle.
Released yesterday, the HIA New Home Sales Report, a survey of Australia’s largest-volume builders, shows that total new home sales declined in April following a strong rise in March.
Total seasonally adjusted new home sales declined by 4.7 per cent in April 2016. The decline in total sales was reflected in both detached house sales (-3.0 per cent) and sales of ‘multi-units’ (-10.8 per cent).
“The trend in new home sales reiterates that the peak for the cycle has passed, but the descent we’re now observing is very mild,” HIA economist Diwa Hopkins said.
“This signals the potential for very healthy home construction activity throughout 2016, much as we have been anticipating.”
She added: “This overall trajectory of total new home sales is consistent with our long-held expectations for new home building activity”.
“Our forecasts reflect an expectation that a modest decline in new home building in 2016 will be largely driven by a decline in multi-unit construction, following the successive record levels that occurred in 2015 and 2014.”
[Related: Property market a 'war zone']