A look at the Foreign Investment Review Board 2016–17 Annual Report

18 Jun 2018

Australia continues to be an attractive destination for foreign investment, with China and the US the top two sources of approved investment.[1]

The Foreign Investment Review Board (FIRB) 2016–17 Annual Report (released 29 May 2018) showed Chinese investors were the largest source of foreign investment approvals by both value (A$38.9 billion) and number (9,714). The US was the second largest source of approvals by value, with A$26.5 billion worth of approved applications. Canada is growing as an important source of investment with A$23.2 billion worth of approvals in 2016–17, an increase of A$7.5 billion from 2015–16.

In total, FIRB approved A$168 billion worth of business-related foreign investment proposals in 2016–17, 4% below the previous year.

Major business-related investment focused on ports and electricity network assets, continuing the trend of acquisitions in these sectors in recent years. Data centres are an emerging area of interest for investors.

Real estate approvals fell from 40,149 in 2015–16 to 13,198 in 2016–17. FIRB states that the most significant factor explaining this drop was the introduction of application fees in December 2015, which resulted in investors only applying for properties they intended to purchase. The Report notes that this may reflect a reduction in the number of applications rather than necessarily a reduction in actual investment. According to FIRB, other factors that may have contributed to the reduction include tighter Chinese capital controls, weaker market conditions and additional taxes imposed on foreign investor purchases in some Australian states.

Australian agricultural land recorded a slight reduction in foreign registration from 14.1% to 13.6% in the same period. The UK remains the largest foreign agricultural land holder (2.6% of agricultural land), followed by China (2.5% of agricultural land) and the US (0.7% of agricultural land).

View the FIRB 2016–17 Annual Report

_________________________
[1]  Interpreting FIRB data must be done with care. The statistics contained in the Annual Report do not measure total foreign investment made in any year, nor do they measure changes in net foreign ownership levels in Australia. They reflect investor intentions (not actual purchases) to acquire Australian assets. They can be skewed by very large investment proposals and multiple proposals for the same target.