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A commercial broker has lauded Austrade’s innovation partnership with China, but warns against adding “red tape” in a market shrouded by increasing regulation.
Daniel Holden, director of HoldenCAPITAL, said programs that encouraged international investment were to be applauded, but the Australian government should avoid making them any more complex.
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The Australian Consulate-General in Hong Kong on 19 July announced a collaboration agreement between Austrade and CBA to support the flow of business ideas and innovation between Hong Kong/Greater China and Australia.
Announcing the collaboration, Consul-General Michaela Browning said: “This agreement provides Hong Kong businesses the opportunity to access the latest technologies in the Commonwealth Bank’s Innovation Lab and to engage themselves in the Australian market, while Australian companies can tap into Hong Kong’s fast growing start-up ecosystem and access international funding and partnerships.”
Mr Holden said it would be “great” if the program could foster more trade and inbound investment, but added: “I actually would like them [the Australian government and regulators] not to get more involved.”
“I love them for what they're doing at the moment; opening doors, getting trade going. But to actually get involved with APRA in a firm sense, I think that would actually hamper the opportunity for the incoming capital and just create more obstacles for local business people to actually get deals and transactions completed.”
Broker opportunity
Mr Holden also said that for commercial brokers, the Chinese market presents an opportunity. Chinese investors can struggle to receive financing, as the Chinese government cracks down on large sums of money being invested offshore, while Australian lenders are also reluctant to lend to Chinese investors due to difficulties in establishing borrowing and repayment histories.
“The opportunity for a broker would be, firstly, helping that international developer navigate the banking market here because there's a lot to understand in that short time frame that they want to get finance up and running in,” Mr Holden said.
“There's not really a yellow pages of non-bank lenders that provide that capital, so I guess the opportunity there is helping that international developer who's just arrived in Australia to navigate bank or non-bank capital and being able to assist them.”
In 2017, HoldenCAPITAL has seen a “substantial” growth in the size of its international client base, growing within three years to one in five clients.
“One in five is a large number of our books to be in that sector," Mr Holden said, "so for us [foreign investment] is definitely growing, and it’s definitely something that we are focused on, on a regular basis.”
[Related: Major banks’ ‘weakened appetite’ for commercial investments will continue: HoldenCAPITAL]
