Two decades after investors were burned by an overheated Queensland property market, experts believe that the Japanese are poised to spearhead a new wave of investment in the Sunshine State.
“This year has been a milestone year for Japanese investment with the signing of the Japan-Australia Economic Partnership Agreement (JAEPA). Japanese business is looking to Australia for opportunities to grow,” said Mills Oakley Senior Associate Levi Smouha.
One example of the resurgent Japanese activity is property developer Sekisui House, which was largely absent from the Australian market following the 1990s crash. Sekisui has recently overseen several major residential developments in Sydney and Brisbane. Other Japanese developers stepping up the pace in Australia include Daisho Group and Daiwa House. “There has always been a consistent Japanese presence in Queensland, but things are showing signs of heating up again,” said Smouha.
Smouha was one of two lawyers who recently participated in a trade delegation to Tokyo, Kyoto and Osaka under the auspices of the Queensland Japan Chamber of Commerce and Industry. He says the delegation attracted a great deal of interest from investors looking for growth opportunities outside of Japan.
“Japan has a dilemma with a shrinking population and a population which is ageing quicker than other developed economies; they can’t just rely on the domestic market for growth,” said Smouha. “With that said, Japan remains the world’s third largest economy by GDP and one of Australia’s strongest trading partners. One area that should get a boost from the JAEPA in particular is financial services, and other professional services including law. Japanese institutional investors are interested in Australia and our professional and financial services sectors are seen as first class.”
Queensland is particularly well placed in this context. “Japan has a long history in Queensland – in fact we were the first State to do business with the Japanese in the late 19th Century, in the pearl industry off Thursday Island and the opening of a consulate in Townsville in 1896,” commented Smouha. Resources, tourism, agriculture and education are other sectors which have enjoyed steady Japanese trade and investment. “The JAEPA looks to strengthen these core areas to shore up a competitive edge well into the future, with the inclusion of a ‘most favoured nation’ status to ensure our exporters will always get the lowest tariffs going into Japan. On the other side, quality products imported from Japan, in particular cars and electronics, should see reduced tariffs and better prices for our consumers. The JAEPA should start to come into effect towards the end of this year.”
The revival in Japanese trade and investment is a welcome development for Smouha, who studied Japanese as an undergraduate degree and spent a year teaching English in Fujiyoshida, a city near the base of Mt Fuji. “The level of goodwill between Japan, Australia and Queensland is at an all time high right now,” Smouha concluded.