Hospitality industry welcomes Significant Investor Visa

​Sydney, 4 December 2012 - The Significant Investor Stream Visa has come into effect in a move tipped to spur increased demand for hotel assets.

The two new visa subclasses are: Subclass 188, the Business Innovation and Investment (Provisional) visa, and Subclass 888, the Business Innovation and Investment (Permanent) visa. They officially came into effect on November 24.

CBRE Hotels’ Wayne Bunz and Mullins Lawyers’ Curt Schatz and Tony Hogarth have been advising numerous Asian based investors who have shown keen interest in the hotel market as well as the Subclass 188 and 888 visas since their introduction was mooted earlier this year. They both expect further movement by a number of those parties in the hotel investment sphere in 2013.

In order to qualify for the visa, applicants will be required to:

1. Submit an expression of interest to the Department of Immigration and Citizenship (DIAC);

2. Be nominated by a State or Territory Government; and

3. Invest at least AUD$5 million in State/Territory bonds; an ASIC regulated managed investment fund; or, a direct investment in an Australian company.

Mr Hogarth, also a Registered Migration Agent commented; “Significantly, English language is not a requirement for these visas although if English does not meet a certain standard, additional fees may be required to be paid to DIAC. This is likely to open up the Australian market to Chinese investors in particular, where language skills may have been a prohibitive factor in the past.”

There is also no upper age limit and the main applicant does not have to meet the business points test.

Mr Bunz of CBRE Hotels Brisbane noted; “The purchase of a hotel, hotel resort or an island with tourist facilities, for example, would be a qualifying business, whereas an investment in vacant land to be held for long term capital gain or rental property might not comply.”

“A number of Chinese groups have inspected assets we have had on the market in recent months, many of whom have watched with keen interest to see the final form of the Significant Investor Visa. We are expecting significant interest in this visa from investors considering the Day Dream Island Resort and Spa.” Expressions of interest have been called for by noon Australia-time on March 14th, 2013.

FIRB requirements may also need to be met, however most commercial enterprises have a substantial financial threshold (currently $244 million) before requiring FIRB approval. The extent of the threshold varies in some instances, depending upon the specific nature of the proposed investment and the nationality of the investor. Americans have a higher threshold than other nationalities (currently $1,062 million for most investments).

“Whilst there are a number of options available for foreigners seeking to invest in Australia and qualify for this visa, it is expected that hotel assets to be particularly attractive to Asian investors because they are one of few qualifying investments that include property and a business as a going concern,” Mr Schatz said.

“Furthermore, Significant Investors can engage management to run the business, they are not required to have direct involvement in managing complying investments, which is a relaxation on the requirements for other business skills visa categories.”

About CBRE Group,Inc.

CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services firm (in terms of 2011 revenue).  The Company has approximately 34,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our Web site at www.cbre.com.