Japanese Resorts Irk Queensland
In northeast Australia, golf courses are the rage for Japanese investors, drawn by cheap land, fair climate
BRISBANE, AUSTRALIA — THIS past June, the Queensland government did the unthinkable. It tried to prevent a Japanese company from taking over a hotel in northern Queensland. Shortly afterwards, Daikyo Inc., the Japanese company, sent a message to the Queensland government. It froze $800 million worth of construction projects in the state, putting hundreds of employees out of work.
``The whole incident created ill will and embarrassment all around,'' says Rod Baines, a public relations consultant for Daikyo. Although the federal government ultimately gave the Japanese the green light to buy the hotel, the issue of Japanese investment in Queensland remains a sensitive subject.
In Cairns, 1,000 miles north of Brisbane, Zita Pobucky, a European immigrant, has formed a group, Australian Citizens Against Foreign Ownership. ``This town has been sold off,'' she complains. Ms. Pobucky sends anyone who asks a long list of Japanese-owned properties.
Alan Hall, news editor of the Cairns Post, says the foreign ownership issue presents local residents with a dilemma.
``Even though a lot of people want the money, they don't like the idea of the Japanese owning the land,'' Mr. Hall says.
The local concern struck a responsive chord in Brisbane with the new state treasurer, Keith De Lacy. Mr. De Lacy challenged Daikyo's proposed acquisition of the Four Seasons Hotel.
State Premier Wayne Goss now distances himself from that challenge, calling the Japanese investments welcome. He disputes the perception that Queensland is becoming a giant golf course and resort for Japanese visitors. ``I don't think it is grounds for substantial concern,'' he says.
Paul Ivory, a lecturer at Griffith University in Brisbane, says it's easy to blame the Japanese. ``They run a very tight, vertically integrated system. The travel agents, the bus operators, the duty-free shops are all Japanese.'' However, he adds, ``How many Australians speak Japanese? There is a lot of sour grapes operating.''
Sour grapes or not, there is no doubt Japanese investment in coastal Queensland is substantial in recent years. Attracted by cheap land prices and a Florida-like climate, the Japanese have invested billions of yen.
Currently in vogue are golf course developments. There are now 31 golf courses in the planning stage or under construction.
Under construction about 100 miles south of Brisbane is a new development, Royal Pines, owned by Matsushita Investment & Development Ltd. It will have a 27-hole golf course, a 22-story hotel, 800-slip marina and a convention center.
It is not as large as the Sanctuary Cove resort and residential community, owned by Electronic & Industrial Enterprises (EIE) of Tokyo. Sanctuary Cove boasts two 18-hole golf courses: the Pines and the Palms.
Nearby are 400 condominiums which start at $300,000 and go up to $1 million. EIE has plans for another 2,000 condos as part of a $475 million expansion. Although Australians are the main buyers, the Japanese are the largest group of foreign buyers.
Daikyo, the largest condominium developer in Japan, has made an even larger investment here - about $800 million over the past nine years.
Land prices going up
According to Mr. Baines, Daikyo now employs 1,200 employees - of which only 20 to 30 are Japanese. However, Ms. Pobucky complains that Daikyo has not brought wealth to Cairns as a whole - only to a select few. ``They are increasing the prices on land and when the prices go up, the tax assessments go up. It impacts the cost for everyone.''
In fact, Premier Goss warns that he will not allow foreign companies to become ``land banks,'' companies that buy the land on speculation. ``It drives up prices and it does not add anything to the economy.'' Goss has been trying to get the Japanese to shift their investments from hotels and golf courses to manufacturing and mineral processing. ``I think we've got a way to go to convince Japanese investors that we can deliver the productivity,'' he says.
In the meantime, they will keep building golf courses.