Business Times - 24 Apr 2008
Australia to give foreign firms more time to develop property
(MELBOURNE) Australia will ease restrictions on land ownership by foreign companies, giving them as long as five years to develop vacant commercial property.
The rules will replace the current one-year deadline for foreign companies to commence development, Assistant Treasurer Chris Bowen said in a statement on his website yesterday. The 12-month limit was designed to prevent offshore investors engaging in land speculation.
Prime Minister Kevin Rudd, faced with inflation growing at the fastest pace in 16 years, wants to drive down prices by introducing more competition in the grocery market, where local operators Woolworths Ltd and Wesfarmers Ltd control more than three-quarters of supermarket sales.
'This reform creates a more level playing field, and pulls down the barriers to entry to foster competition,' Mr Bowen said in the statement. 'The grocery industry is a classic example, where in Australia we have a highly concentrated sector, especially by international standards.' The current rules discourage new competitors and prevent existing operators from expanding, Mr Bowen said.
Woolworths is the nation's largest grocer, followed by the Coles unit of Wesfarmers and the IGA chain operated by Metcash Ltd. Aldi Group, Germany's largest discount retailer, has more than 150 stores in Australia; Franklins, a unit of South Africa's No 2 retailer Pick'n Pay Stores Ltd, operates an 80-outlet chain.
Costco Wholesale Corp, the largest US warehouse-club chain, is identifying sites around the country to build large format outlets in Australia, it said in October.
'Twelve months is simply not enough time for completing all the statutory and commercial processes required to enable development to commence,' Mr Bowen said\. \-- Bloomberg
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