December 20, 2018

On 18th December, the Investment and Development Manager of Heworth Group, Christopher Walsh, had an interview with Nanhai Media, discussed the Australian real estate market and investment trends.


2018年12月18日,玺沃集团(Heworth Group)的投资与开发经理Christopher Walsh接受了南海传媒的采访,讨论了澳洲的房地产市场和投资趋势。



Christopher Walsh


Chris has been in the property industry for ten (10) years and holds a bachelor degree in business (property) and a diploma in project management.  He is responsible for Heworth’s active investment and development projects.






In recent years, there has been a tendency that Chinese investors would prefer to invest in the overseas market. Heworth mainly focuses on investment in Australian real estate, how is the local economy currently performing and impacting property?




Heworth is mostly focused on the Sydney real estate market at present.Australia’s economy is strong and still very attractive to overseas investors.


While the residential sector has softened in the major cities over the last 12 months, and will likely continue to do so until early 2020, commercial real estate has performed well.








Fortunately, Australian real estate cycles vary for each sector and so one sector can be doing well and seeing good growth while another sector can be contracting.  That’s why we invest in multiple sectors and own businesses that complement each other but effectively sit in different industries.






Your company's business model is quite unique compared to other fund management and construction companies in the market, perhaps you can give us a better understanding of how Lendbuild actually works?





We’re essentially providing a risk management service.Think of Lendbuild as a project partner, who makes up for any equity shortfall from the developer’s side and then also completes the construction phase on their behalf.





Both lender and developer find this model so appealing because it de-risks, what is traditionally one of the riskiest stages of the project – the construction phase – where costs can blowout and cash flow issues can ultimately, stall or stop a project.






You mentioned risk management before, how does Heworth ensure the safety of your investors' funds in the Lendbuild model?



We approach each Lendbuild project like we would any potential investment, by conducting extensive due diligence, both in house and using external specialist advice, identifying the various investment risks, and ensuring these risks have been or can be mitigated.




If a project fails to meet our risk control standards and requirements we simply do not proceed with it. Only fully vetted LendBuild projects are presented to our investors. Heworth also co-invests in every Lendbuild project, committing a minimum of 20-percent of the investment capital being raised. 






So, risk control plays a significant role in Lendbuild, what other investment criteria do you consider before investing into a project?



Without getting too technical, we’ll look at the investment return, project gearing levels and debt coverage, how the loan can be secured, the developer’s track record – in terms of experience, project size, years in operation – macroeconomic factors, location and supply in the area, and how the project performs under different scenarios, through undertaking what we call “sensitivity analysis”.








Have you ever invested in a risky or unfinished project before?



The word “risky” is quite subjective… I am going to assume you mean a high level of risk.  So…





No we haven’t, Heworth’s risk control methods are strict and prevent us from investing in anything considered “high” risk or greater.




With regards to unfinished projects, that’s the benefit of the Lendbuild model – we guarantee that the project will be finished – fortunately to date we haven’t needed to step in and take control from a developer who thinks they can’t complete their project. Obviously though, the contingency plan is that we would step in if required.








OK, that’s Lendbuild, what about the development and fund management side of your business? Why don’t you tell us about some of the current investments Heworth are involved in?

以上,我们讨论了关于Lendbuild模式的运行,那有关开发和基金管理方面呢? 您可以讲几个Heworth参与的投资案例吗?


Balmain 项目


Our Balmain development is a landmark project, located in Sydney’s inner west with over 28,000m2 of mixed use space, spread across three (3) 12-storey towers, including residential, commercial, specialty retail, and entertainment and has an end project value of close to $400M.




位于悉尼CBD核心地段的 160 Sussex Street 项目


160 Sussex Street is a 14-storey office building in the Sydney CBD, just opposite The Hyatt Hotel, which we purchased last year.  Our investment strategy focuses on asset improvements and leveraging strong capital growth in the office market during our investment term.  We are forecasting a return on investment in excess of 100-percent over five (5) years.


另外值得一提的是位于Sussex Street 160号的商业楼, 这幢14层高的写字楼位于悉尼CBD,就在凯悦酒店对面,我们于去年将这幢写字楼成功收购。我们的投资策略是在投资期内升级改造这幢商业楼,并利用强劲的商业楼市场实现资本增长。我们预测,这项投资的回报率将在五年后超过100%。




There was a big shift in Australian real estate market this year, how has this impacted you?



Yeah, the residential sector took quite a hit… Economics had been predicting this for the last few years, as a minor correction was required.




We are well placed at the moment though, with all of our current residential projects being 100-percent presold or in the early planning stages not due to come to market until the next cycle begins.






Do you think it is a good time to invest now?



Definitely – we see this year and next as a great investment opportunity.




Our development pipeline will mature in the next 3-4 years, and should take advantage of the next phase of positive growth in the residential market.




Development projects and the type of lending we offer generates high returns, which allows our investors access to investments typically reserved for institutional investors and family offices.





Heworth Group is a distinguished integrated property investment house with a track record in delivering all aspects of the property development lifecycle. Heworth has successfully delivered close to 1 billion dollars of investment in Australia in the past 6 years.




Heworth is made up 3 main businesses, fund management, development, and construction. Heworth also created the Lendbuild business model, which provides developers finance and construction solutions.







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