The Sydney Opera House – File photo by AFP
The Sydney Opera House – File photo by AFP

SYDNEY: India’s wealthy, from old money to nouveaux riches IT entrepreneurs, are quietly snapping up hotels and mines Down Under just as Australia embarks on an immigration campaign to attract long-term investment.

The Jindal family, ranked among the world’s top 80 richest by Forbes, in May bought two minor stakes, worth a total of A$26 million, in Australian iron ore and coal mines through Jindal Steel & Power.

That followed a US$2 billion purchase by Indian self-made billionaire and college-dropout Gautam Adani of a coal mine in the state of Queensland last year.

Silverneedle Hospitality, a company backed by Nadathur S. Raghavan, an Indian philanthropist and co-founder of software company Infosys Technologies, just bought a hotel in Brisbane for A$57 million. Last year, it bought a chain of about 60 hotels in Australia and New Zealand for an undisclosed sum.

“In the last six to nine months, there has been a lot of private investment into Australia because it is seen as a safe-haven,” said Paul Dowling, principal analyst at banking research firm East & Partners.

While Indian nationals have traditionally favoured Britain and North America as offshore investment destinations, private wealth bankers have noticed a growing demand for Australian real estate, particularly hotels and serviced apartments.

This comes as no surprise to Singapore-based Paul Guest, head of research and strategy at LaSalle Investment Management, as commercial property prices in Australia are very attractive.

With a forecast of about 10 percent per year, he said total returns in Australia are the highest in Asia, topping Japan’s 9 percent and South Korea.

Also underpinning demand is Australia’s relatively strong economic performance compared with Western peers.

Indeed, Australia is one among a select club of only eight nations that can still boast a pristine ‘triple A’ rating with a stable outlook.

Dubbed the lucky country for its abundance of natural resources, white sand beaches and kind climate, it is now entering its 21st year of uninterrupted annual growth, having dodged a recession after the 2008 global financial crisis.

Attracting rich This year, Australia will overtake Spain as the world’s 12th largest economy, despite being 52nd in terms of population.

This explains the massive increase in Australia’s foreign direct investment which leapt to A$67 billion ($69.56 billion) in 2012, nearly double the previous year, according to government statistics.

Still, private investment from India, a country that produces millionaires every day, would appear to lag that from others such as China.

Analysts reckon China is leading the pack though the Australian government does not keep statistics on direct investment by nationality.

For Arjuna Mahendran, head of Asian investment strategy at HSBC’s private bank in Singapore, the lag is due to a general perception in India that Australian incentives are not as generous as those of other countries.

That is one reason the Australian government will next month launch a “significant investor” visa programme, with the aim of competing with New Zealand, Canada and Singapore in attracting a growing number of Asia’s rich.

India is home to more than 7,000 millionaires whose fortunes amount to nearly $1 trillion, data from global wealth intelligence firm Wealth X shows.

Combined with $465 billion held by Indian nationals living outside their home country, the total is roughly equivalent to the size of Australia’s entire economy.

Analysts speculate that within five years, India could have pumped as much as $30 billion into Australia.

The new Australian visas will target individuals who invest at least A$5 million in certain assets, such as infrastructure government bonds, in return for concessions on the usual migration requirements including qualifications and English skills.

Such immigration schemes tend not only to bring much-coveted long-term investment, but also contribute to economic growth and job creation.

Indian nationals seem well-placed to benefit from the programme. India has become Australia’s biggest source of migrants, including a large number of IT entrepreneurs.

“Many of them are very interested in exploring the path to permanent residency,” said Mark Wright, immigration leader partner at Deloitte Australia.

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Comments (20) Closed

Shahrukh Khan
Oct 03, 2012 10:45pm
if you mean what you said then vote for PTI and bring the change to get rid of corruption.
Jay K Raman
Oct 03, 2012 08:01pm
These millionaires should not forget their duty towards the millions of poor in India. Wealth alone will not fulfil anybody's life.
Tahira, USA
Oct 03, 2012 10:24pm
At l;east the president and son can afford to easily invest a few billion.
Oct 04, 2012 11:47am
Good to invest in one's own country and make it rich. Pakistanis are wiser, not the Indians. After all, once you have a million, what more you need for yourself. Make your home country rich dear fellows.
Oct 03, 2012 08:17pm
pakistani millioners also must invest in Australia. Our millionaires are hiding their money under the pillow. Indian people are well respected in foreign countries while we waste time in offering bounty
Oct 04, 2012 04:56pm
why does it always have to be india versus pakistan and viceversa
Oct 04, 2012 12:43am
US already have such investment option called EB-5 visa.
Oct 04, 2012 01:19am
This is in-spite of corrupt politicians in India who are as good/bad as the Pakistani ones!
Oct 04, 2012 07:25am
GR8 work done by Indians.
Oct 04, 2012 07:27am
Pakistanis ..learn somethings..
Cyrus Howell
Oct 05, 2012 10:05am
Are you joking?
Cyrus Howell
Oct 05, 2012 10:08am
Voting will not stop corruption. No chance of that.
Parwaiz Abidi
Oct 05, 2012 05:58am
But it does buys a Lamborghini.
Oct 04, 2012 06:40am
AWESOME!!! Way to go India.. Proud to be Indian
Avik Ray
Oct 03, 2012 04:34pm
For what? For investing or trying to get a permanent residency?
Raw is War
Oct 03, 2012 03:54pm
Oct 03, 2012 01:01pm
Good for India and Indians. I hope that Pakistan's corrupt politicians become sincere to their country and put Pakistan on a progressive path.
Oct 03, 2012 03:31pm
Oct 03, 2012 12:24pm
Oct 03, 2012 03:16pm
Indians are moving in a planned manner to become world's NO. 1 economy by 2050.