Giant Japanese real estate developer Mitsubishi Estate Asia will back a major housing estate in NSW’s Illawarra region being undertaken by the private Abadeen operation, as the state’s housing industry digests the collapse of developer Bathla.

While the Bhart Bhushan-led empire is being broken up as lenders step into key sites and start developing them directly – and hopes remain of a rescue plan for some sites – the move by the Japanese group shows that premium operators are winning support.

The Japanese group already has ties with Abadeen and a host of top developers including Lendlease, where it has backed luxury skyscrapers in Sydney. It is also developing Sydney’s $2.3bn Harbourside precinct with Mirvac in a 50:50 joint venture.

In the latest deal with Abadeen, the pair will develop RIVA Calderwood, a new masterplanned estate with more than 230 new homes in one of the Illawarra’s fastest-growing regions.

RIVA Calderwood builds on existing ties between Abadeen and MEA at the Putney Wharf Harbourfront Precinct in Sydney, and is the pair’s next move in expanding into Australia’s housing sector.

The partnership shows that large-scale international players have confidence in Australia’s long-term housing fundamentals despite the slowing sales reported by major developers including Stockland and Mirvac.

Mitsubishi Estate Asia is backing a housing estate development by Abadeen in NSW’s Illawarra region.

The interest is heaviest in backing top operators who are expanding in growth corridors that address the more affordable end of the living sector.

The estate in Shellharbour is part of the broader Calderwood Urban Development Plan. RIVA Calderwood is designed around the Macquarie Rivulet with a focus on lifestyle.

House and land packages are targeted at a mix of first-home buyers, growing families, downsizers and lifestyle purchasers, with the net cast wide after the Albanese government’s shock property tax changes.

Homesites range from 300sq m to more than 2000sq m, so purchasers have the flexibility to design homes.

Abadeen executive chairman Justin Brown said the partnership was a milestone for both organisations to expand into the more affordable end of the housing market and demonstrated the growing appeal of Australia’s living sector to global investors.

“We’re incredibly proud to be partnering with Mitsubishi Estate Asia to deliver RIVA Calderwood,” he said. “MEA has an outstanding reputation internationally and continues to demonstrate its high conviction in Australia’s residential market through its investment in high-quality communities.”

Mr Brown said the project reflected Abadeen’s continued expansion into masterplanned communities across Australia, where there is pressing need for more stock to address the housing crisis.

MEA head of Australia, Yosuke Matsunaga, said Australia continued to present compelling long-term opportunities for residential investment.

“Abadeen’s track record of delivering high-quality residential communities and our shared long-term investment philosophy made them a natural partner for this project,” he said. “We look forward to a strong and enduring partnership with Abadeen and exploring further opportunities to work together in the future.”

Japanese companies have made large forays into home building and development with the likes of Sekisui House and Asahi Kasei Corporation active.

“Australia continues to benefit from strong population growth and sustained demand for quality housing, and MEA looks forward to continuing to actively invest and grow its business in Australia,” Mr Matsunaga said.

The first public release at RIVA Calderwood is planned for September with the developer optimistic about the site that fits into the affordable end of Abadeen’s pipeline. The company also develops premium boutique apartments and mixed-use projects.

It sports an active project pipeline valued at more than $3.5bn and a strong national presence. Abadeen is working on 20 projects across NSW, Victoria, Queensland and WA.

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The surge of Japanese investment into local commercial property markets shows no sign of letting up with Mitsubishi Estate Asia again backing a development in the relatively new field of logistics.

The group, which initially emerged as the backer of high-rise projects ranging from offices, including the Salesforce Tower in Sydney, to residential schemes, like Lendlease’s planned luxury project overlooking Sydney’s Hyde Park, has spread its wings into new areas of property.

Japanese companies are now focused on backing commercial developments and owning income-producing assets rather than investing in costly resort and golf course projects as they did in the 1980s.

Mitsubishi Estate Asia is now working with Asian warehousing giant ESR on developing a $700m logistics estate in the western Sydney suburb of Huntingwood, aiming to capitalise on rising demand for space.

The tie up is the second joint venture between the two companies as they target high-demand logistics development opportunities along the east coast.

ESR and MEA’s other venture is a $175m estate in the Melbourne suburb of Pakenham.

Mitsubishi Estate Asia head of Australia Yosuke Matsunaga said the partnership was in line with MEA’s strategy to deepen its exposure to Australia’s logistics sector.

The firm also has a venture with property funds house Charter Hall to back a logistics centre in Melbourne and its forays are often followed by other groups from Japan.

“We are confident that this partnership will further strengthen the relationship between ESR and MEA. Huntingwood offers everything we look for being scale, location, and a development partner with a proven track record. We look forward to delivering something exceptional here,” Mr Matsunaga said.

An artists impression of the planned ESR Huntingwood logistics estate.

ESR president Phil Pearce said the partnership demonstrated continued investor confidence in his company’s Australian platform and development capability. “This is our second partnership with Mitsubishi Estate Asia in the past two years, and the Huntingwood investment is clear testament of the strength and momentum of this relationship,” Mr Pearce said.

He described Huntingwood as a premium logistics site “in one of Sydney’s most sought-after industrial precincts”.

“We’re excited to deliver a best-in-class estate alongside a partner who shares our vision for world-class developments in Australia’s key growth markets,” he said.

The ESR Huntingwood Development Partnership will turn the 18.3ha site into a premium, multistage logistics estate, with building to kick off in the second half of the year, and the warehouses to be completed from mid-2027 onward.

The estate will have up to 114,005sq m of warehousing space and is expected to win local and international customers seeking modern facilities with direct access to the M4 Motorway and Great Western Highway.

The partners are looking to capitalise on the demand for premium logistics space, backed by ESR’s development pipeline of more than $10.2bn across Australia and NZ.

ESR last year kept the Huntingwood site under its control after striking a deal worth more than $300m for the land. Colliers agents Gavin Bishop and Sean Thomson and Cushman & Wakefield agents Tony Iuliano and David Hall handled the deal.

Private equity firm KKR and UAE sovereign wealth fund Mubadala Investment Company sold out after backing the site’s purchase by a predecessor firm, Logos, for $236m in 2022. Logos was later acquired by ESR as part of a wider corporate transaction.

Huntingwood Logistics Estate is well-connected to key freight corridors and is near the future Western Sydney International Airport.

Western Sydney has low vacancy across core industrial precincts, with limited serviced land available, and many sites have been targeted by data centre developers.

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