Samurai In The Surf: The Arrival Of The Japanese On The Gold Coast In The 1980s

SAMURAI

SURF

The Arrival of the Japanese on the Gold Coast in the 1980s

JOE HAJDU

Pandanus Online Publications, found at the Pandanus Books web site, presents additional material relating to this book. www.pandanusbooks.com.au

SAMURAI in the SURF

SAMURAI in the SURF THE ARRIVAL OF THE JAPANESE ON THE GOLD COAST IN THE 1980S

Joe Hajdu

PANDANUS BOOKS Research School of Pacific and Asian Studies THE AUSTRALIAN NATIONAL UNIVERSITY

Cover: Gold Coast skyline and Pacific Ocean beaches. Photograph by Joe Hajdu © Joe Hajdu 2005 This book is copyright in all countries subscribing to the Berne convention. Apart from any fair dealing for the purpose of private study, research, criticism or review, as permitted under the Copyright Act, no part may be reproduced by any process without written permission. Typeset in Goudy 11.25pt on 14pt and printed by Pirion, Canberra

National Library of Australia Cataloguing-in-Publication entry Hajdu, J. G. Samurai in the surf: The arrival of the Japanese on the Gold Coast in the 1980s ISBN 1 74076 115 4 1. Japanese — Queensland. 2. Investments, Japanese — Queensland — Gold Coast. 3. Tourism — Queensland — Gold Coast. 4. Gold Coast (Qld.). I. Title. 332.67352094

Editorial inquiries please contact Pandanus Books on 02 6125 3269 www.pandanusbooks.com.au Published by Pandanus Books, Research School of Pacific and Asian Studies, The Australian National University, Canberra ACT 0200 Australia Pandanus Books are distributed by UNIREPS, University of New South Wales, Sydney NSW 2052 Telephone 02 9664 0999 Fax 02 9664 5420 Production: Ian Templeman, Justine Molony, Emily Brissenden Every endeavour has been made to trace and acknowledge the copyright holders of graphic material contained in this work. The Publisher welcomes any advice on material not correctly acknowledged.

Anyamnak, aki nelkul mind ez nem tortent volna meg…

ACKNOWLEDGEMENTS

NEEDLESS TO SAY this study would not have been possible without the cooperation and help of many people on the Gold Coast. This applies particularly to those who were kind enough to give me the time to sit down and discuss with me their views or the details of their involvement with Japanese property investment and development. Such people included Japanese investors, company representatives, developers, local real estate agents and property consultants, urban planners, architects, property valuers, financiers, academics, journalists, and community activists. The rich trove of facts, opinions, insights and anecdotes that came out of these discussions helped channel my investigation into ever more directions; and so enabled me to write a book of this nature. Other people in government or the property industry in Brisbane, Canberra, Sydney and Melbourne were equally helpful. Divers employees of the State Library of Victoria should also be mentioned. They supplied me unfailingly with folder after folder of newspapers, always getting the dates right and having them ready for me at the irregular times when I appeared to scan them. I would also like to record my appreciation of the encouragement and constructive comments made by Professor Bill Logan and Associate Professor Louise Johnson of Deakin University to an earlier incarnation of this manuscript. Their insights are apparent in many sections of this book. Finally, there was mother, Eta. She was an enthusiastic Gold Coast resident for twenty years and my visits to her provided the initial impetus for this whole project. Sadly, she is not here to see its completion. Joe Hajdu August 2004

CONTENTS

Introduction Chapter 1 Japan and the creation of its bubble economy Chapter 2 ‘Australia … so much sunshine … so much space … so cheap.’

1 12 31

Chapter 3 Japanese investors: doing it their way on the Gold Coast

45

Chapter 4 Japanese investors: from company executives to pop stars

72

Chapter 5 The Gold Coast gatekeepers and intermediaries: help given to bond with Japanese buyers

104

Chapter 6 The Gold Coast of the Japanese: postmodern glitz, packaged landscapes and the Beirut look

127

Chapter 7 Yen power stirs national angst

145

Chapter 8 Governments buffeted by cross-currents of public pressure, interests and ideologies

175

Chapter 9 Postscript: the bubble bursts

198

Appendix

223

INTRODUCTION

THE EVENING OF Monday the 23rd of March in 1987 was one of those balmy autumn evenings which the Gold Coast has no difficulty producing. This evening however saw an event on a scale and with a flamboyance the likes of which had not been seen before. It was the opening of the Gold Coast International Hotel at Surfers Paradise. A journalist of the local newspaper, the Gold Coast Bulletin, described the scene in the following way: A baby kangaroo snoozed in a shawl. A kookaburra and some pink and grey Major Mitchell parrots studied the cocktail party scene impassively from their gum tree branches. Thankfully, what they thought of the hundreds of shouting humans drinking and eating as if a famine was at hand, can’t be recorded, but certainly the scene was different from their usual habitat … Five metre high eucalypts, bales of hay were assembled for the start of celebrations … Koalas were available for cuddling … [However] The real live animals were only a part of it … In a flurry of anthuriums and carnations, the staff composed themselves and at 6.30pm the stage was lined with rows of immaculate youths carrying silver trays of pale pink champagne. As the stretch limousines and taxis glided to the front entrance the lines of people queued to present their gold invitations at the top of the marble stairs, a troop of Tahitians bounded into the foyer, whooping and stomping. It was just one of the fifteen ethnic groups to perform inside the hotel that evening. Semi-naked Aboriginal and New Guinean dancers wove their way through the invited hordes who spilled over two levels of the hotel. The Gold Coast sequin and rhinestone supply must be sadly depleted judging

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by the shimmering outfits paraded around the hotel. There were sequins everywhere — on shoes, in hair, on shoulders, on hand bags and on belts.’1 The report continues with descriptions of the tastebuds of the 2,000 guests being indulged by tables groaning under the weight of platters of smoked salmon, trays of oysters, legs of ham and roast turkeys. By the hotel pool a grill had been set up and the aroma of crepes stuffed with cooked meat and vegetables wafted across the terrace. While towards the end of the evening the downstairs cafe, with its mountains of pastries set next to steaming urns of coffee and glasses of liqueurs, became the site of hundreds of milling and jostling guests. In the centre of all this was Shuji Yokoyama, the President of the Daikyo Kanko Corporation of Tokyo. It was his money that had paid for the Gold Coast International Hotel and its grand opening. The whole celebrations cost $2 million and lasted three days. Three days before this huge party the Premier of Queensland, Sir Joh Bjelke-Petersen, had flown in escorted by a battery of nine helicopters to officially open the 296 room, $70 million, five-star hotel. Yokoyama had chartered a jet to bring his friends, politicians and business associates from Japan. To these were added Australian national luminaries of the time such as Sir William and Lady Sonia McMahon, Alan and Eileen Bond, and entertainment personalities Kylie Minogue and Jason Donovan. The Channel Nine ‘Today Show’ beamed the proceedings at the hotel across Australia. If one event symbolised the euphoria of the late 1980s Australian Boom and Japan’s role in fuelling it, the opening of the Gold Coast International Hotel was that event. In the late 1980s press headlines such as ‘The sun also rises on the Gold Coast’, ‘Japanese set for Surfers assault’, ‘The Japanese buy a funpark — Surfers’, and ‘Japanese dictate Gold Coast destiny’, bore witness to the pivotal role of the Gold Coast in the flow of Japanese money into Australian property.2 It had all happened in two or three years. From negligible beginnings in 1985, by 1988 the total value of Japanese real estate holdings and planned projects in Australia was estimated at $10.1 billion, of this about $4 billion was located on the Gold Coast.3 By the beginning of the next decade Gold Coast real estate agents were talking of the Japanese property presence being worth ‘nearly five billion’.4 If the monies to be spent on their proposed Gold Coast hotel, resort and apartment projects

Introduction

3

were all counted, then the total rises quite considerably beyond that. There was an equally dramatic rise in the flow of Japanese tourists to Australia, a majority of whom included the Gold Coast in their visit.5 The sight of the Japanese on holiday at Surfers Paradise, most still in suits and smart dresses, tramping towards the sea clutching their Nikon camera packs poised to photograph each other or snap a seagull became a common occurrence. Such a beach foray was usually a prelude to traipsing off towards the shopping delights of Cavill Mall and Orchid Avenue. There, Japanese signs started to proliferate on duty-free shopfronts, in real estate agent windows, in hotel foyers, even on the flashy facade of the Penthouse nightclub in Surfers Paradise. Suddenly Gold Coast business people were interested in finding a Japanese speaker who could help sell souvenirs, day tours, night bar visits, if not a high-rise apartment, to the visitor from Tokyo shy of using their limited knowledge of English. The charms of the Gold Coast as a place to visit, if not to live in, were now being advertised not just by the travel agent back home, but also on illuminated boards above the stairways leading to the platforms of key Tokyo and Osaka subway stations.6 The spending prowess of the Japanese on the Gold Coast became legendary: stories abounded of young Japanese office ladies entering a boutique and clearing out whole racks of clothes and chocaholic Japanese visitors spending over $100 each on their intoxicating, sweet drug.7 Furthermore, it was the wedding ceremony of Hiromi Go, the Elvis Presley of Japan, and his film star bride, Yurie Nitani, at the Opera House in Sydney that led to the booming wedding ceremony business at key tourist resorts such as the Gold Coast.8 This event was covered by 50 Japanese media organizations, and so the Japanese wedding and honeymoon package tour quickly became a multi-million dollar industry for places like Sydney and the Gold Coast.

Shuji Yokoyama and Sir Joh BjelkePetersen at the official opening of the Gold Coast International Hotel on 20 March 1987. Source: Daikyo Australia Pty Ltd.

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Some Japanese who came to look also bought property. It was these Japanese who quickly became the most discussed new arrivals on the Gold Coast. Estate agents who were quick to realise the potential of the strong yen saw their money-making dreams come true. The financial bubble of the Japanese economic boom of the late 1980s landed on the Gold Coast and kept inflating over ever wider circles of property activity. Between 1986 and 1989 the turnover and profits of estate agents, property consultants, developers, planning engineers and such skyrocketed.9 In the favoured coastal strip of Main Beach, Surfers Paradise and Broadbeach house values often doubled in less than two years.10 What was this Japanese-fuelled boom doing to the Gold Coast? After the Plaza accords of 1985, Max Christmas, a doyen of the Gold Coast property industry, was quick to see the significance of the steep rise in the value of the yen. He commented that Japanese investors would find buying Australian real estate a ‘picnic’; two years later it seemed more like a ‘banquet’: ‘I’ve been here for 34 years and I’ve never seen anything like the potential the Japanese are offering us.’11 The Japanese bought high-rise apartments, houses with canal frontages, office buildings, hotels, and development sites with whatever was or was not on them. Japanese money built hotels that set new standards of opulence, introduced the integrated golf course resort to the Gold Coast, and pushed high-rise apartments to levels of luxury not seen before. All these new additions to its urban ambience gave the Gold Coast ever more splotches of a gelati postmodernism. This transformation was a far cry from its architectural roots found in the tumble-down charm of its fibro holiday shacks, decaying walk-up flats, and the modern, functional high-rise apartments built in the 1970s and early 80s. The changes came so quickly that some favoured sites near Pacific Ocean beaches of Main Beach, Surfers Paradise and Broadbeach were seeing the building-demolition cycle repeat itself three or four times in a generation.12 The Japanese and their money brought the world to the Gold Coast. Prior to their arrival, the Gold Coast was the place to which Australians from the Brisbane region and the southern states went to have a holiday in a tent, caravan, motel or a rented flat.13 Until the opening of Jupiters at Broadbeach in 1985, there was no worldclass hotel on the Coast. The presence of the Japanese with their pockets full of strong yen changed all that.14 As tourists they had

Introduction

5

more money to spend than most Australians and as investors they wanted properties of world standard, no matter what the cost. In 1988, local journalist and historian Alexander McRobbie suggested we say ‘Sayonara to the Old Surfers’, as the Japanese presence was well on the way to changing it forever.15 The Japanese developers had usually visited Hawai’i and southern California and some had already invested in tourist projects in Honolulu or in the Los Angeles area. So they were aware of what was seen as ‘best practise’ in hotel, apartment or golf course design, and that is what they wanted on the Gold Coast. This drew a wave of architects, resort designers, interior decorators and so on to service clients flush with money to invest. One example helps make the point: The construction arm of the large Mitsui conglomerate joined forces with Japan’s largest consumer credit financial institution the Orient Corporation to establish a property development company, Kuji. This company bought a large site on the shores of the Nerang River, opposite the luxurious Paradise Waters canal estate. The Mitsui Construction Company had already completed projects in various parts of Asia and the Pacific, as well as Europe and Central America. For their Gold Coast high-rise apartment building the directors of Kuji wanted the best that 1980s styling could give. They turned to the Hulbert Group, a Vancouver-based firm of architects with offices in Miami and newly arrived on the Gold Coast. What Hulbert designed for them was a 43 storey mauvecoloured faux Art Deco building which would not have been out of place in one of the sets of the TV series ‘Miami Vice’. The building rose towards the sky from a pre-packaged landscape of tropical palms, neo-classical loggias and pools of water with contemplative Japanese-style stepping stones. All that was fashionable in contemporary building and landscape design was there. The world had really arrived on the Gold Coast. But not everyone was happy with the changes that were sweeping over the Gold Coast during the late 1980s. Particularly because it was the Japanese and their money that were driving this transformation. As the Deputy Opposition Leader in Queensland commented: ‘Your kids and my kids will find some time in the future that the future of their children will be discussed in the boardrooms of Tokyo.’16 A cartoon in the broadsheet southern metropolitan press summed up these fears: it showed a tugboat with a Japanese flag and captain tearing a piece of land labelled ‘Gold Coast’ out of the

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Australian continent and pulling it away in a north-easterly direction.17 The sense of losing control, of being under the sway of a power with a dark past, of seeing Australia change in ways that were unfathomable, if not undesirable, of seeing the country being ‘sold out’, took hold in the minds of some people. If this is what becoming part of Asia meant then some on the Gold Coast, if not in many other parts of Australia, did not want it. The arrival of the Japanese on the Gold Coast in the late 1980s was seen by people as a graphic instance of what the Federal government’s rhetoric about Australia being part of Asia might mean. Here were a group of Asians with great financial power moving in to buy, build, and live among a community with a strong ageing Anglo-Celtic flavour. This Gold Coast experience was more sudden and overpowering than that experienced in the preceding decades by the now large cosmopolitan cities of Melbourne or Sydney. These southern cities had had an influx of people from all parts of the world, but spread over a generation. So the story of the Japanese on the Gold Coast becomes an important episode in Australia’s movement towards closer relations with Asia and the filtering down of these changes throughout the community. But this story has another perspective as well; that of the Japanese investors who came to the Gold Coast. Who were they? They ranged from retirees to owners of family companies and partnerships, to the icons of Japanese corporate life, not to mention the upstarts of the Japanese bubble economy. What was happening in Japan during the late 1980s that gave them such wealth and confidence to go out and invest? Why did they think the Gold Coast was such an attractive place for them to put their money? Who were the local people who helped them convert their dream of a Gold Coast property into the bricks and mortar of a hotel, golf course resort, high-rise apartment, or home with a private boat jetty? Meanwhile, how did the Federal and Queensland governments respond to all the questions raised by the largest group of Asian investors Australia had ever seen? This book aims to address these questions.

Perspectives on the story Chapter 1 looks at the arrival of the Japanese on the Gold Coast in relation to the dramatic economic and social changes that were transforming Japan in the 1980s. To understand what they did on the Gold Coast one has to glimpse the Japan from which they

Introduction

7

came. Their discovery of the Gold Coast is seen as part of the contemporary Japanese image of the Pacific basin as their country’s economic and recreational backyard. Chapter 2 elaborates on this by looking at how the Japanese have traditionally seen Australia and particularly, what made the Gold Coast attractive to them as a place to visit and invest. Was it considerations of business or was it lifestyle appeal that drew them there? How did their own cultural values affect their images of the Gold Coast? Chapters 3 and 4 give details of specific Japanese who came, bought and developed the Gold Coast, and the local property moguls who sold to them. How the Japanese imprint on the Gold Coast exploded is most clearly seen through the personalities, aims and achievements of four very different people: the large condominium builder turned golfing enthusiast from Tokyo; the established manufacturer drawn to leisure property activities by the promise of the 1980s boom; the get-rich-quick protégé of influential Japanese politicians with global business ambitions; and the exceptional woman property manager who became part of the Surfers social scene and whose project reached new pinnacles of residential opulence. Chapter 4 also gives an overview of the range of Japanese companies and individuals who bought, built and developed property ventures on the Gold Coast. When they arrived on the Gold Coast, most Japanese who wanted to buy property there knew relatively little about the place, spoke poor to passable English and needed professional help to conduct and complete their purchases or developments. The local people who helped them were the estate agents, assemblers of development sites, solicitors, planning consultants, architects and landscape designers. Agents were the gatekeepers who led the novice Gold Coast investor to the properties that suited their aims

Gold Coast International Hotel in Surfers Paradise. Source: Daikyo Australia Pty Ltd

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and budgets, whereas the engineers, valuers and architects provided the professional services that converted an idea into the reality of the completed hotel or golf course resort. Chapter 5 looks at the relationship between the Japanese and the local gatekeepers and the providers of professional property services. The key local players introduced are: the largely self-made estate agent with a keen sense of the business opportunity that the Japanese provided for him; the Gold Coast intermediary in diverse property deals; the engineer/ planning consultant who helped translate the Japanese investors’ dreams to Gold Coast reality; the architect from Japan turned consultant and Gold Coast property developer; the migrant Japanese solicitor who gave legal advice and became a cultural intermediary between Japan and Australia; the firm of architects who led the investor to the fashionable design styles and adapted them to make them appealing to people coming from the Japanese culture. By the mid-1990s these developments had produced a Gold Coast that was, in many ways, quite different from that of ten years earlier. Chapter 6 presents a sweeping bird’s-eye view of the metamorphosis of Australia’s premier resort city. The arrival of the Japanese was welcomed by many as an economic opportunity and as a sign of the Gold Coast having ‘grown up’. Other people, however, were wary, if not fearful. Chapter 7 considers the controversy which the Japanese presence unleashed on the Gold Coast; a controversy which soon blew up to become a national debate about the sort of people Australians are and should seek to be. In the late 1980s and early 90s, Japanese investment was an issue in Federal and Queensland election campaigns, with echoes of it reappearing in the One Nation phenomenon that has stretched into the twenty-first century. The beliefs, values, opinions and prejudices of the participants in the dispute about the Japanese that took place on the Gold Coast were revealed very clearly, so, in a sense, the debate about the Japanese was a debate about the soul of Australia. This debate has been an ongoing one and what was said by people on the Gold Coast has continued to be a sensitive undercurrent to Australian national life. The background, personality and activities of the organiser of the anti-Japanese movement on the Gold Coast provide a focal point to this important theme.

Introduction

9

Government as a symbol of the ‘national interest’, government as policy-maker, government as regulator, government as arbitrator, government as participator in the debate about the Japanese and their investment capital, cannot be left out. Therefore, this is the theme of Chapter 8. Hidden behind the role of Canberra and Brisbane in the Japanese investment controversy was the question: What, in the age of free, unfettered movement of capital, can and should governments do to respond to their citizens’ fears about the impact and power that such capital represents? This debate became the hidden agenda behind much of what was said and written at the time. Finally, it is important to look back. The Postscript in Chapter 9 draws together some of the strands followed in the earlier chapters and points to developments since the late 1980s in both Japan and on the Gold Coast. They reveal the Japanese presence on the Gold Coast to have been a phenomenon which symbolised many things that characterised the late 80s: the on-rush of globalisation, the suddenness of Japanese wealth, the extraordinary bubble economy of Japan and the national hubris it produced, an Australian government that made turning towards Asia an article of faith, and economic and cultural changes within Australia that rewarded some but unsettled others. In the late 1980s, the arrival of the Japanese on the Gold Coast gave the ‘Australia part of Asia’ slogan a local and directly felt edge. It transformed a relatively small city in ways that its residents could not have previously imagined. It brought a flood of strange visitors and a number of new residents into their midst. These were people about whose culture most locals knew little, and what many of the older ones did know was based on images and experiences of their youth that rekindled fear and trepidation. Australia’s relationship with its Asian neighbours is a constant of national debate, in fact it is even more than that: it has become part of the controversy about what Australian national identity really is, how it has changed, and where it will go in the future. The Japanese presence on the Gold Coast touched a nerve that resonated through national life, a nerve that continues to be touched in one way or another at regular intervals. On the one hand this book seeks to tell a fascinating story about people, projects and places, but in its deeper meaning it says something about Australians and how they battle to define and see themselves in a rapidly changing world.

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Footnotes 1 2

3 4 5

6

7 8

9

10

11 12

13

14

Gold Coast Bulletin, 24 March 1987. The Weekend Australian, August 8–9 1987; The Weekend Australian, 19–20 September 1987; National Times on Sunday, 21 February 1988; The Australian, 1 December 1990. Gold Coast Bulletin, 20 October 1988. Gold Coast Bulletin, 28 March 1990. The number of Japanese tourists visiting Australia rose from 53,699 in 1981 to 345,021 in 1988, of these nearly two-thirds made the Gold Coast the focal point of their visit or included it in a more extensive tour of the continent. During a stay in Japan in 1990 I was struck by such advertisements at Tokyo’s Shinjuki and Osaka’s Namba stations. Gold Coast Bulletin, 1 July 1987. Companies such as Australian Wedding Blessings Pty Ltd were established to cater to this new market. A Western-style wedding was seen as prestigious, and holding it in Australia cost about $10,000, whereas in Japan a wedding cost on average $34,000 (Sydney Morning Herald, 21 February 1988). The large Gold Coast property agency PRD Realty Pty Ltd had seen its business with Japanese clients grow from $1 million in 1985 to $490 million in 1989 (Gold Coast Bulletin, 30 April 1990). Average third quarter house price in 1987 Surfers Paradise was $295,317, Main Beach $116,821, and Broadbeach $124,000; during the third quarter of 1988 the average house values for the same locations were $451,160, $453,538 and $352,750 respectively (Rider Hunt Gold Coast Pty Ltd). The Bulletin, 29 September, 1987, p. 56. Peter Spearitt, ‘More glitz, more sprawl, on the Gold Coast’, Australian Society, December 1989/January 1990, pp. 26–27. The Gold Coast as a tourist resort was until the early 1950s the weekend retreat for Brisbane people. After that the rise of car travel and cheaper airline holiday packages led to the growth of visitor numbers from the southern states. The high-rise property boom of 1968–70 and 1979–81 on the Gold Coast was fuelled by investors from Sydney and Melbourne (J. Hajdu: ‘The Gold Coast, Australia: Spatial Model of its Development and the Impact of the Cycle of Foreign Investment in Property during the late 1980s’, Erdkunde, vol. 47, no. 1, pp. 40–51). The tourists from Japan were estimated to spend $155 per day, compared with $120 spent by American visitors, and $47 by Australians for every day they stayed on the Gold Coast.

Introduction

15

16 17

Alexander McRobbie, The Real Surfers Paradise, Pan News Pty Ltd, Surfers Paradise, 1988, pp. 579–99. Gold Coast Bulletin, 27 March 1987. The Age, 18 June 1990; even a contemporary Australian film picked up this imagery: in Reckless Kelly, a production by Yahoo Serious, the hero Ned Kelly finds his home threatened by a villainous international banker who plans to tow the island to Japan for conversion to a tourist resort.

11

Chapter 1

Japan and the creation of its bubble economy

HOUSES IN JAPAN do not have a street address. Instead, their location is signified in terms of the neighbourhood they are in and the individual number given to each house. This has led to much confusion for foreigners trying to find the home of a person they seek to visit, or even the location of a shop that has been recommended to them. For example, visitors think of the Ginza in Tokyo as a street, whereas it is really the name given to a whole district.1 However, since World War II the name has also been used to refer to the main shopping street of the district, and the streets that cross it are usually referred to with numerical names. The pivotal intersection is that between Ginza and 4-chome. This is where the exclusive shopping street is at its most exclusive. The most lavish store of the Mitsukoshi department store chain is on one corner and diagonally opposite it is the Mikimoto pearl jewellery shop. Next to it, on the corner, is the Hattori Building, in which the shop window of its exclusive women’s fashion and accessory boutique displays items of which even the cheapest is likely to be discreetly labelled at ‘Y360,000’. The clock tower atop the Hattori Building is one of the best known landmarks of Tokyo. But it was a small, functional structure placed onto the footpath opposite the Hattori Building that became the symbol of Tokyo in the late 1980s. This was the Ginza neighbourhood sentry box of the

Japan and the creation of its bubble economy

13

Tokyo police where, among other things, strangers could go and ask the location of an address they couldn’t find. During the 1980s property boom the square metre of footpath occupied by this police box became the most valuable piece of land in the world. The price of urban real estate in the centre of the Ginza district was estimated to be $US350,000 ($A540,000) for each square metre. In other words, over half a million dollars would buy a site just large enough to accommodate the small sentry box. At the time, the world was stunned at what it read about the skyrocketing land prices in Tokyo. The Imperial Palace and its 115 hectare park in the centre of Tokyo was estimated to be worth $A404 billion, and the Australian government made a killing by selling a third of its 1.8 hectare embassy grounds for $640 million.2 Tokyo was only the most extreme example of a land boom that had engulfed the whole of Japan. The international press liked to amaze its readers by giving vivid comparisons between the value of land in Japan and other countries: the grounds of the Imperial Palace were said to be equal in value to the whole of California, the nominal total value of land in Japan at the height of the boom in 1988 was estimated at $US1.2 trillion, this was two and a half times the value of the whole of the United States, yet the United States was over 25 times the size of Japan.3 What had happened? Was Japan

Tokyo: Intyersection of Ginza and 4-chome. Source: J. Hajdu

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reaching such new dimensions of financial power that it would soon replace the United States as the dominant economic force in the world? These were the key questions that were being asked all over the world as the 1980s came to a close.

The Japanese road to wealth Yet, if we roll back the reel of Japanese historical imagery four decades or so the picture could not have been more strikingly different. Then, the centre of Tokyo was a wasteland of charred wood and ashes with scarcely a building standing.4 This landscape of total destruction extended kilometre after kilometre from one end of Greater Tokyo to the other. Allied planes had dropped incendiary bombs in parallel swathes across Tokyo, unleashing a firestorm in the city. Little was spared. In 1945, a completely destroyed Japan seemed destined for economic and political oblivion. However, with the advent of the Cold War, and especially the Korean War (1950–53), the United States changed policy and started to encourage the economic revival of the country. Yet, in 1955, a decade after the end of the war, the Gross National Product per person in Japan was only $US268.5 This was a figure more typical of a Third World country than that of a nascent economic superpower. The transformation of Japan during the three decades from 1960 is one of the most extraordinary themes of twentieth century history. It was the result of the hard work of its people and a consistent government policy that focused on national growth. If during the 1941–45 period the Japanese people were mobilised for the war effort, then during the following decades their focus was reconstruction, the acquisition of new technology and economic growth.6 The population had a high savings rate and this was effectively channelled into productive investment. The government, the banks and industry co-operated closely to achieve set targets of industrial innovation and production. Business loyalties and the cross-ownership of shares between banks, manufacturing and construction companies meant easy access to loans for business and gave banks a say in the management of companies.7 The general liberalization of international trade in the post-1945 decades meant that Japanese products were free to enter the international market. The results were dramatic. During the two decades 1955–75 Japan saw a 25 fold increase in the value of its exports. Its largest market was the United

Japan and the creation of its bubble economy

15

States and by 1980 Japan was recording progressively larger trade surpluses with its most important trading partner. These deficits continued to increase and by the mid1980s the value of what Japan was selling to the United States was more than twice what it was buying from them.8 This led to increasing criticism of Japan in Washington, not to mention increasing public hostility as Americans saw jobs being lost as Japanese manufacturing imports outcompeted the local cars, trucks and electrical goods. The Americans argued that, on the one hand, the Japanese had been amassing more and more wealth from the sale of their goods to all parts of the world yet, at the same time, they wished to continue to isolate their financial system from global competition. Most specifically, argued the Americans, Japan manipulated the exchange rate of the yen to the US dollar at levels much below that which their commercial success warranted. In other words, Japanese products had an unfair advantage on world markets and Japan was using a cheap yen to build up ever larger trade surpluses with the United States. After 1980, Washington went on a ‘Geoeconomic Offensive’ against Japan.9 Washington brought pressure to bear on Tokyo to deregulate its financial market so that its financial institutions would be fully integrated into global markets. This also opened Japan to US and other foreign banks and financial dealers to conduct business there. However, the most important decision that arose out of this American pressure were the Plaza Accords of September 1985. These sought to manage a reduction of the US dollar against the yen through government manipulation of global currency markets. The results were spectacular. In less than a year the Japanese yen increased in value by nearly 50 per cent. In July 1985, two months before the Plaza Accords,

Tokyo: Lavish window display of the Wako boutique in the Hattori Building on Ginza. Source: J. Hajdu

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one US dollar bought 242 yen, by April 1986 this had decreased to 171 yen, and by January 1988 to 123 yen. This meant that in 20 months the yen had doubled in value in relation to the American dollar.10 Similar rises occurred in the value of the yen in relation to the other major world currencies, including the Australian dollar.11 This rapid appreciation of the yen led to a large outflow of Japanese capital. Suddenly travel outside Japan became much cheaper. Even more important was the effect of appreciation on foreign investment: land, property — any type of overseas asset — became half the price it had been less than two years earlier. The Japanese people had had a long tradition of frugality and now, suddenly, they found themselves among the wealthiest nations in the world. In 1988 per head income in Japan, when expressed in the newly appreciated yen, exceeded that of the Americans.12 Within Japan itself dramatic economic, financial and social changes occurred.

The economic bubble inflates and transforms Japan Japan’s large trade surpluses and high levels of personal savings had already given its banks a high level of liquidity. Now, after 1985 and with the arrival of foreign banks to compete with them on their home turf, Japanese banks were determined to retain their market share. Traditionally, Japanese banks had been conservative lenders, but now they threw caution to the wind and started to lend prodigiously.13 This was also encouraged by interest rates that were amongst the lowest in the world.14 Much of this lending was for property development and speculation. Loans were used to buy land, which in turn created collateral for another loan to buy more land. As many developers in Japan were working according to this formula, land prices rose quickly and so even more collateral was created. The boom just went on and on! Bank loans for real estate purchases and projects rose from Y16.5 trillion in 1984 to Y40.0 trillion in 1991, and this does not include sums lent by other financial institutions.15 Commentators at the time noted that ‘land prices in Tokyo are soaring to stratospheric heights, far in excess of the growth rate of the real economy’.16 The first reason for this was the rise in demand for offices and homes as financial deregulation had made Tokyo a leading world financial centre. Japan’s huge pool of investment capital was an obvious drawcard, but Tokyo’s location on the far side of the globe from New York and London meant that it became part of the interconnected chain of financial centres that enabled

Japan and the creation of its bubble economy

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trading to occur twenty-four hours of the day.17 However, it was also the speculative investment in property that drove up prices. People selling homes and shops in the city centre were plowing the proceeds into real estate in areas further out. This spread the fever of speculation from the commercial districts of Ginza, Akasaka, Shibuya and Shinjuku to the suburbs throughout the Tokyo urban region. Between 1983 and 1987, land prices in central Tokyo increased by 260 per cent, and at the peak of the boom in 1987, the increase was 62 per cent.18 Capital that did not flow into property went into shares. The Nikkei Index rose from an average of 7,500 in 1982, to 12,000 in 1985, to peak at 38,915 on 29 December 1989. At the end of 1989, it was estimated that the value of shares on the Japanese stock market was close to one half (42 per cent) of the total capitalization of world stock markets.19 Shares were also used as collateral for loans, hence, the higher their prices went, the more money their owner could borrow. And borrow they did. New speculators entered the market, people who had not ‘gambled’ with shares before. More and more Japanese played the stock market — small shopkeepers, civil servants, young professionals, even housewives — they all caught the get-rich-quick bug. In the late 1980s even the international art market was dominated by the Japanese. In March 1987, the Yasuda Fire and Marine Insurance Corporation bought Van Gogh’s ‘Sunflowers’ for $US43.1million, it then proceeded to use it as the company’s logo. In November of the next year the Mitsukoshi Department Store invested in Picasso’s ‘Acrobat et Jeune Arlequin’, and in May 1990 Ryoei Saito of Tokyo bought two paintings for $US160.6 million; ‘Au Moulin de la Gallette’ by Renoir and ‘Portrait of Dr Gachet’ by Van Gogh. Saito owned the Daishowa Paper Company and he admitted that the purchase of these paintings was motivated by his quest for prestige in the Japanese business community. A survey a decade later found that of the ten highest prices ever paid for a painting, five were paid by Japanese buyers between the years 1987 and 1990. It was also estimated that between 1986 and 1990 Japanese buyers spent $US7.1 billion in the New York, Paris and London art markets.20 No wonder this period became known as ‘Japan’s extraordinary 1980s, the age of the bubble’.21 The value placed on owning land in Japan and land as a form of investment played a crucial role in the way the bubble economy

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played itself out, not to mention the quest to buy land in other countries that many Japanese were able to indulge in during the boom. There were values attached to land that Americans or Australians would find a little strange, and, when the Japanese went overseas, they took these values with them as a part of their cultural baggage. It is, therefore, worthwhile to look at the Japanese relationship with land a little more closely. Firstly, there has always been a great shortage of land in Japan. There are 12 times as many people on each square kilometre of land in Japan as there are in the United States. A comparison of population densities between Japan and Australia is, as expected, much more extreme: 110:1. Even countries like India, Britain and Germany are not as densely settled as Japan. The country with which Japan can be best compared is Belgium, despite the fact that most of the territory of Belgium is equally densely settled, while four-fifths of Japan is mountains and forests. The majority of its population is jammed into a long coastal ribbon of a megalopolis stretching from Tokyo through Nagoya, Kyoto, Osaka-Kobe, Hiroshima, to Fukuoka. Land is very scarce to say the least, it is therefore highly valued, very expensive and, where possible, intensively used.22 The spacious suburban gardens of the Australian and North American cities reappear in Tokyo or Osaka as a square metre of ground holding a few small tubs of bonsai. Secondly, until the middle of the twentieth century Japan was a largely rural society and, even three or four decades later, most city dwellers still had a father, uncle or older brother who tilled a rice paddy or vegetable patch near the traditional home village of the family. This gave people’s relationship to land qualities beyond that of a commercial asset. Because of this it could be said that there has always been something feudal in the way the Japanese have regarded land.23 Basic to this was the belief that possession of land gave status and it was also not susceptible to cyclic downturns like the rest of the economy. Land was ‘rock steady’ or just went on becoming more and more valuable. The fact that this was largely a piece of Japanese folklore was something they would soon discover to their own great detriment both at home and through their purchases in the United States and Australia. Given the role that land played in Japanese culture, it is not surprising that they had developed a system of credit based on a land standard. When considering whether to provide a loan to an

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individual who wants to buy a home or a company that seeks to expand its plant, a bank in Japan will pay particular attention to the physical collateral, the land. Land has always been regarded as the ultimate security, as compared with Australia where greater weight is given to potential returns on assets. During the bubble economy period in the 1980s, banks went overboard in the acceptance of land and buildings — whose prices kept rising — as ‘secure’ collateral. When a firm of developers came looking for a loan, a bank would pay little attention to intangible assets, such as the firm’s overall managerial expertise and record of business success. About the only screening criterion bankers were interested in was the value of the firm’s real estate. Thus, if an individual or company owned or was able to buy a promising piece of real estate in Tokyo, Osaka or Kobe, it would get the loans to purchase more development land in Japan or overseas. The result of this business culture is summed up by the Japanese economist Akira Kojima in the following way: In this way one mechanism inflating the speculative bubbles was a chain in which financing backed by real estate expanded, loans were funnelled into real estate, the value of real estate rose, and financing expanded again.24 This process transformed many areas of Japan. Huge amounts of capital were used to develop chains of resorts in many regions of the country. The government was stung by American and European criticism that the Japanese were just ‘work animals’ with a very poor quality of life. Such foreign criticism encouraged Japanese politicians to develop policies to reduce working hours and encourage the population to look at leisure as a worthy endeavour. The government even published a glossy booklet in English to

Tokyo: Police sentry box at the intersection of Ginza and 4-chome. In the late 1980s, this was the most expensive real estate location in the world. Source: J. Hajdu

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convince the world that the Japanese were not just a nation of workaholics, but valued their leisure time.25 In a more tangible way, Tokyo revised its Labor Standards Law to introduce a staged reduction of working hours from forty-eight to forty per week. In this political climate the development of leisure facilities was seen as a top priority. In May 1987, parliament passed the Resort Law that gave tax breaks, attractive financial packages and speedy planning permits to resort developers.26 The newly very affluent Japanese were encouraged to put as much effort into their leisure activities as they had into their work and the government was going to help this process by giving inducements to developers to provide the appropriate facilities. This whole phase in the establishment of leisure amenities was triggered in earnest by the opening of Disneyland Tokyo in 1983. Its success was followed by a series of theme parks in various parts of Japan, each one creating in miniature a replica of some faraway place or figment of Japanese romantic fantasy. There was a miniature Venice built in Hiroshima, a Russian village in Niigata, a Canadian world at Ashibetsu in Hokkaido, a Spanish Costa del Sol in Kure, a Gluck kingdom of the Grimm Brothers’ fairy tales in Hokkaido, and a perfect replica of the Rhine castle of Marksburg on the island of Miyakojima. Perhaps the two most amazing theme park resorts were the Huis Ten Bosch and the Seagaia. Huis Ten Bosch was built on the shores of Omura Bay near Nagasaki in southwestern Japan. On a 152 hectare site and at a cost of more than $US2.5 billion, the developer sought to re-create a seventeenth century Dutch town.27 There is a ‘Rubensstraat’ and a ‘Vermeerstraat’ with cobbled paving. Dutch architectural plans were used to build replicas of the town hall of Gouda, the offices of the Dutch East India Company, Amsterdam Concert Hall and Nijenrode Castle near Utrecht. A number of museums, numerous shops in high-gabled buildings, a six kilometre network of canals, streets and streets of housing, and the five-star Hotel Europe that takes paying guests, completed the picture. For the sake of authenticity, no costs were spared, even many of the red bricks used were imported from the Netherlands. There were regular ‘Dutch Life Happenings’ like folk dancing and a Dutch Harvest Festival. A number of blond, blue-eyed guides were on permanent stand-by to pose with groups of visitors for the proverbial photograph.28 At Huis Ten Bosch, Japanese visitors could experience the ambience

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of ‘Olde Europe’ without the hassle of having to find their way through strange languages and modes of behaviour unintelligible to someone used to the monoculture and social order of Japan. On the opposite coastline of Kyushu Island at Miyazaki in southwestern Japan an even more extravagant leisure project was built during the 1980s bubble economy.29 It was given the name of the Seagaia Resort. Even though the Pacific Ocean was only 300 metres away, Seagaia’s main attraction was the world’s biggest fake beach. It was 140 metres long and consisted of small, specially rounded pebbles of marble imported from China. The beach was fringed by plastic palm trees and backed by a painting of blue skies with small puffs of white cloud. This whole beach creation was roofed by a giant Ocean Dome. This enabled the air temperature to be kept at a constant 30 degrees celsius, and the water temperature was set at 28 degrees. A wave-making machine ensured that the visitors could surf, or, if that became boring, they could use the giant slides that propelled them into the water past a fake volcano that erupted on cue. Ocean Dome had a maximum capacity of 10,000 people. Seagaia also had a 45 storey luxury hotel, tennis courts and zoo — the highlight of which was a bizarre daily show featuring gloved attendants directing pink flamingos through a series of elaborate dance routines to the background of stirring classical music. This extravaganza cost $US2.1 billion. According to the local entrepreneur behind it, ‘Seagaia is a place that represented the twenty-first century where man, culture and nature would be intimately linked’.30 Needless to say, Seagaia also had an international golf course. All resorts developed in Japan had a golf course, and it appeared that most property companies jumped into golf course development during the boom. On the one hand this reflected the perceived demand, but on the other it was triggered by speculation arising out of the financial incentives provided by the Resort Law of 1987.31 All anybody had to do was announce plans to start a golf club, sell memberships, use the money raised to buy land and build the club, and then have the remaining money to speculate. McCormack described an instance of how the system worked. In 1990, buying the land and establishing an 18-hole golf course near Osaka cost about $A330 million, so if 1,000 members could be subscribed at an average fee of $660,000 each, there would already

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be a profit of 100 per cent. Such a profit was often realised even before the course was opened.32 The ability to trade golf club memberships as if they were shares encouraged this craze. A booming market in golf club memberships developed, encouraged in part by the fact that companies often paid for them as part of the salary packages of their senior employees. The result was that the value of club memberships as tradeable commodities increased by about 400 per cent between 1982 and 1989.33 Seen in retrospect, if the Japanese land boom of the late 1980s had a symbol, it was the golf club resort. The golf resorts built during the 1980s boom were usually a ‘threepiece-set’. They consisted of a golf course, a hotel/condominium complex, and either developed ski slopes or a marina.34 A malleable planning process, often ‘oiled’ by monies being passed from the developer to local politicians, meant a quick building permit and so such golf course projects proliferated during this period. Favoured sites were in the foothills and mountain areas within driving distance of the major cities of Tokyo, Nagoya, Fukuoka, and OsakaKobe.35 If agricultural land could not be used then trees were removed, mountain tops levelled or even streams diverted to create the flat surface of 100 hectares required for the golf course.36 However, this whole frenetic craze of golf course development begs the question — why? It is true to say that in all Western countries, particularly in the New World, a rise in affluence has seen a similar rise in the popularity of golf as a sport. In Japan, particularly in corporate Japan, this trend seems to have been carried to extremes. Yet Japan, with its scarcity of land, had an environment where golf courses were the most difficult and costly to establish. The answer lies in the very high social cachet that golf had in the eyes of many Japanese. The origins of this lies in the period of the American military occupation of Japan after 1945. The US military established golf courses for their own use, this made golf the preserve of the successful, victorious power and gave it a high socio-cultural status in the eyes of many Japanese. Gradually, selected Japanese gained access to these golf links, and golf evolved to be seen as the exclusive Japanese leisure activity. Success in one’s career with a company often meant being invited to join games of social golf with colleagues and superiors, or to take part in company tournaments. Needless to say, playing golf also became a way of making business contacts and doing deals.

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McCormack argues that the group dynamics of Japanese culture ensured that this led to the desire for participation in such a prestige activity being ‘blown sky-high’. Rivalry between the large corporations magnified the stampede to participate in the game of golf.37 In turn, the 1980s boom gave many individual entrepreneurs and small companies the opportunity to emulate the business culture of the prestigious large corporations and one way of doing this was to join a golf club, or, better still, to invest in the development of a golf resort. The proliferation of golf courses and golf course resorts was the result. In 1956 there were 72 golf courses in Japan, in 1964 this had risen to 424 and by 1977 to 1,322. By the end of the boom in 1990 there were 1,706 courses, with another 325 under construction and 983 at the planning stage.38 The total number of golfers was estimated at 17.8 million, or one person in seven of the Japanese population.39 As ownership of a golf course resort was seen as a sign of commercial acumen and corporate status, it quickly developed to play an important role in Japanese overseas investment. The Japanese banks may have been inexperienced in lending for foreign property ventures, but this did not make them hesitant to do so.40 The flow of investment capital out of Japan accelerated in the second half of the 1980s, so more and more of it went into golf course resorts at specific locations around the Pacific basin.

Japanese capital flows into the world Japanese money flowed into property in Southeast Asia, especially Malaysia, Indonesia and Thailand. Some of this capital went into golf course resorts. In Thailand, the number of golf courses went from nine in 1986 to 204 ten years later, whereas in Malaysia it doubled to 88 by 1990.41 The spur for such Japanese investment was often the presence of a growing Japanese business community, as well as the rapidly rising number of Japanese tourists. The lure of being able to play golf for much less money than at home encouraged more and more Japanese to take overseas holidays, and, with the newly revalued yen in their pockets, such travel appeared remarkably cheap. The other favoured location for Japanese golf resorts was the United States, especially Hawai’i. Japanese investors established them near Honolulu, and on the islands of Maui and Kauai.42 However, it was the purchase of the Pebble Beach resort in California which made many Americans sit up and take note of the

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surge in Japanese ownership of US property.43 The purported plan of its Japanese buyer to turn Pebble Beach into a private club and finance the project Japanese style by preselling memberships at very high prices raised a storm of controversy in the United States.44 But then Pebble Beach was only the most recent of American economic and cultural icons to ‘fall’ to the Japanese. The Rockefeller Centre in New York was bought by Mitsubishi in 1987 for $1.4 billion, the Seibu Saison conglomerate paid $2.27 billion for the Intercontinental Hotel chain in 1988, Columbia Pictures was taken over by the Sony Corporation in 1989 for $5 billion and, not be outdone, in 1990 Matsushita (National Panasonic) became the owner of Universal Studios for $6.1 billion. The United States became by far the most important destination of Japanese investment, with its two largest cities New York and Los Angeles and the sunbelt areas of Hawai’i and southern California–Arizona, getting the largest share.45 Though some Japanese investment was used to buy or build manufacturing plants in the United States, more and more flowed into property, so that, by the end of 1987, the Japanese were the largest foreign owners of urban real estate in Hawai’i and California and the second largest in New York state.46 A few statistics give some idea of the sheer volume of Japanese investment in other countries and the dramatic surge in this flow of capital out of Japan during the 1980s boom. During the 42 year period from 1951 to 1993 Japanese investment in other countries totalled $US422,555 million, of this $US236,198 million or 53.8 per cent was invested during the period 1986 to 1990.47 So, during this five-year period of the boom, more money left Japan to buy foreign assets or develop mines, factories, apartments, office buildings and leisure resorts than during the previous 37 years put together. Japanese money just poured into the United States, followed at a distance by the United Kingdom, with Australia in third place. There were two new features about this flow of Japanese investment capital: its unprecedented volume and the fact that, in Australia, most of it now did not go into opening up mines or building factories, but into property. Until the mid-1980s very little Japanese money flowed into Australian property. Rather, Japanese investment helped open up mines whose products were sold back to Japan and funded the building of manufacturing enterprises such as automobile and

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electronics factories that enabled Japanese companies to develop their markets in Australia.48 In the mid-1980s, this changed dramatically. In 1983–84 only $A9 million was invested by the Japanese in buying real estate in the cities of Australia. During the next financial year (1984–85) this figure rose to $A85 million. It was in September 1985 that the Plaza Accords led to the dramatic rise in the value of the yen. Suddenly, the price of foreign assets like land and buildings was halved. The effect was instant: in the financial year 1985–86, Japanese investors put $1,003 million into Australian property. In the years that followed, the wave of Japanese money sweeping into Australian property continued to surge. It peaked at $A8,443 million in 1988–89. During the fiveyear period 1985–86 to 1989–90 $A22,951 million was spent by the Japanese to buy land for urban projects, houses, apartments, office buildings, hotels and resorts. This figure also includes monies committed to the financing of projects for which the development sites had been bought by a Japanese individual or company.49 Some of these Japanese buyers of Australian property had never dabbled in property outside Japan. They were swept up in the overseas buying spree of their compatriots. Some had attended briefings given by their bank on property investment opportunities in Australia. To some Australians, Japanese purchases of property appeared nearly as casual as buying a pair of shoes. For example, in January 1988 a wealthy couple from Tokyo arrived in Sydney, looked around and bought the small office building at 143 York Street for $A11 million. In the same week, the chairman of a family-owned real estate agency from suburban Tokyo bought an office block in North Sydney from the AMP Society, cost: $9.8 million.50 Thus, a great wave of Japanese investment into Australia fed the sense of general euphoria about the 1980s boom. It also continued the long Australian experience of relying on foreign capital to fund national development and, at times, fuel short-term speculative fever. But, until the middle of the twentieth century, much of this capital came from Britain and, since then, from the United States; now it came from Japan, a country with a very different culture, about which Australians were largely ignorant or about which they had mixed feelings. The suddenness of its arrival and the sheer scale of Japan’s new financial power were greeted with awe, if not fear, among some groups of people in Australia. Press headlines mirrored

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this feeling: ‘The New Asian Invasion’, ‘Australia: Japan South’, ‘Japanese snap up Australian offering’, and ‘Japanese Takeaway’, they said.51 The sense that the Japanese and their money were somehow buying up the country, a sense that they were ‘everywhere’, could be read into it. In fact they were not ‘everywhere’. The Japanese investors and developers bought only in certain places in Australia and, even there, only at specific locations. Central Sydney and its North Shore suburbs saw a substantial flow of Japanese money into the purchase of office buildings, hotels, homes and a few resorts, but much less flowed into property in the other state capitals.52 However, the tourist/leisure regions of Queensland were particularly favoured. Cairns and the Gold Coast were the prime destinations. It was these places that had the immediate appeal for the Japanese who were breaking-out of their traditional life of hard work and frugality to enjoy their new financial freedom to travel, savour their leisure and, in many cases, even acquire overseas assets. T. Kumakura of the Mitsubishi Bank in Sydney summed up the interest of his fellow nationals in Australia in the following way: Australia is a land of travel lure and also a pleasing summer and winter resort for Japanese, since seasons are reversed and security of life and property is maintained. There are great possibilities that tourists from Japan will keep increasing in accordance with the opening of more facilities to serve Japanese. In other words, investments by Japanese enterprises in construction of hotels and development of resorts will gain momentum, correlatively with an increase in Japanese tourists.53 In conclusion, to understand why the Japanese came to the Gold Coast as visitors, investors or developers, it is important to know something about the cultural baggage they brought with them from their home country. The Japan out of which they burst forth with such suddenness in the 1980s was undergoing revolutionary economic changes that were transforming the lifestyles of its people. At the same time, when they went overseas, the Japanese carried with them values that were deeply imbedded in their psyche. The fundamental value of land and the status attached to its ownership was perhaps one of the most important of these. As well as that, there was their general belief in the desirability of aiming for the highest standard in all ventures, whether shopping for clothes, constructing an apartment block or

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designing a golf course resort. The group competitiveness in the quest for economic success and social status was a third cultural trait that underpinned it all. In the 1980s their skyrocketing wealth gave them unbridled opportunities to demonstrate this at home and in many parts of the world. The fact that their propensity for hard work and successful group dynamics had transformed Japan in a generation from being a destroyed and disgraced country to an economic superpower gave them a collective self-confidence that at times bordered on arrogance. It is in this mood that more and more Japanese set out to use their great financial strength to seek real estate opportunities in other countries. Apart from their desire for extra income and wealth, ownership of property in a foreign country now also gave the Japanese entrepreneur status at home; and once a prestigious company went out and bought and built, the new-rich speculator had to follow suit. In this quest for overseas travel, if not foreign property assets and projects, the Japanese soon set eyes on Australia. For that country had many attributes which their homeland did not. It was their recognition of this which encouraged them to board aeroplanes in increasing numbers and fly south to Australia to enjoy its environment and lifestyle, not mention its cheap land.

Footnotes 1

2

3 4

5

6

‘Gin’ means silver and ‘gin-za’ refers to a silver mint which was established there in 1612. ‘Tokyo’s Imperial Palace is priceless real estate’, Courier-Mail, 14 July 1991; ‘Opening to end Tokyo land saga’, Courier-Mail, 14 September 1990. The sale enabled Canberra to build a whole new embassy compound, including 5,000 square metres of office space, 43 apartments for staff, a 700 square metre ambassador’s residence, a 1,400 square metre entertainment area and a 8,500 square metre basement carpark, and show a tidy profit. Weekend Australian, 22–23 October 1998. Richard Storry, A History of Modern Japan, Penguin, Harmondsworth, 1968, pp. 227–8. Edwin O. Reischauer & Albert M. Craig, Japan: Tradition & Transformation, Allen & Unwin, Sydney, 1989, pp. 288–302. Gavan McCormack, The Emptiness of Japanese Affluence, Allen & Unwin, Sydney, 1996, p. 3.

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9 10

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12 13

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18 19

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Andrew Leyshon, ‘Under Pressure: Finance, Geo-economic Competition and the Rise and Fall of Japan’s Postwar Growth Economy’, in: S. Corbridge, R. Martin & N. Thrift (eds.) Money, Power and Space, Blackwell, Oxford, 1994, pp. 116–145. Japan’s exports to the United States in 1985 had a value of Y15,553 billion, its imports from the United States were valued at Y6,213 (Japan Statistical Yearbook 1992, Bureau Management & Coordination Agency, Tokyo). Leyshon, ibid., pp. 128-34. A detailed account of this whole process and its consequences is found in: M. Itoh, The World Economic Crisis and Japanese Capitalism, Macmillan, London, 1990. In December 1983 one Australian dollar bought 214 yen, whereas in December 1985 one dollar bought only 102 yen. Per capita income in Japan in 1988 reached $US23,190. Zin Sawachika, Japan Management Corporation. Personal communication, 19 October 1994. To discourage short-term capital inflows into Japan, its Standard Lending Rate fell in an uninterrupted manner from 7.50 per cent in 1980 to 3.375 per cent in 1988 (Japan Statistical Yearbook 1992). Y. Noguchi, ‘The Bubble and the Economic Policies in the 1980s’, The Journal of Japanese Studies, vol. 20, no. 2, 1994, pp. 291–329. Y. Takeuchi, ‘Tokyo and the Land Crisis’, Japan Echo, vol. xiv, no. 3, 1987, pp. 35–6. Mitsuharu Ito, ‘Tokyo’s Growing Pains’, Japan Echo, vol. xiv, no. 3, 1987, pp. 37–41. The Nikkei Weekly, 25 March 1991. Christopher Wood, The Bubble Economy: The Japanese economic collapse, Sidgwick & Jackson, London, 1992, p. 8. G. Baker, ‘Do I hear $48 million?’ Good Weekend, 5 September 1998, pp. 36–8. Noguchi gives three economic indicators that highlight the main features of the bubble economy: between 1984 and 1989 Japan’s gross national product rose by 32.1 per cent, but the total value of shares traded on the Tokyo Stock Exchange increased by 281.9 per cent, and the value of residential land in Tokyo rose by 249.7 per cent during the same five-year period (Noguchi, ibid., p. 292). Much of Japanese heavy industry has been built on land reclaimed from the sea, as are many of its ports and major airports. For example, the Kansai Airport was built on an artificial island in Osaka Bay. Wood, ibid., pp. 49–50. Akira Kojima, ‘Deflation in Japan, Disinflation around the World’, Japan Echo, vol. 29, no. 6, 2002, pp. 18–21.

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26

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30 31

32 33

34 35

36

37 38

39

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The Japanese Leisurescape, Japan External Trade Organization (JETRO), Tokyo, 1989. Overall Resort Area Adjustment Law (Sogo hoyo chiiki seibi ho) of May 1987. Giving financial incentives to develop resorts was also seen as a way of encouraging development in Japan’s economically most backward districts. The fact that this policy held the promise of giving contracts to the Liberal Democratic Party’s traditional supporters in the construction industry only made it a more attractive political proposition. The Dutch theme was chosen to symbolise the fact that between 1636 and 1854 a small group of Dutch merchants confined to the island of Dejima in Nagasaki harbour were the only point of contact between Japan and the West. ‘Dutch Resort has no Trouble Staying Afloat in Recession’, Japan Times, 17 May 1994; ‘Euroland, Made in Japan,’ Die Welt, 29 May 2004. ‘Sun, sand & ceiling’, Weekend Australian, 25–26 May 2002, pp. 14–15; ‘Leisure resort fails as bubble bursts’, The Age, 21 February 2001. ‘G8 adventure in paradise loss’, The Australian, 12 July 2000. Yoshiko Ohkura, ‘Golf Courses and Resort Developments: Reflections of Japanese Society’, Paper delivered at 20th Anniversary Conference of Asian Studies Association of Australia, LaTrobe University, Melbourne, 8–11 July 1996. McCormack, ibid., p. 90. The decision of the Japan Supreme Court in 1982 allowed golf club memberships to be traded and used as collateral for bank loans, but they were not classified as ‘securities’. This gave them tax advantages. Ohkura, ibid., p. 6. Peter J. Rimmer, ‘Japanese Investment in Golf Course Development: Australia–Japan Links’, International Journal of Urban and Regional Research, vol. 18, no. 2, 1994, pp. 234–55. See especially Figs. 3&4, pp. 240–1. As Ohkura points out, the ecological consequences of this were often highly detrimental — the impounding and purifying effect of the forest on rainwater is lost, so water rushes over bare surfaces and may cause soil erosion and flooding downstream; also, chemicals and fertilisers used to maintain golf course lawns enter the groundwater and rivers and contaminate them (Ohkura, ibid., p. 3). McCormack, ibid., p. 92. Gavan McCormack, ‘The price of affluence: The political economy of Japanese leisure’, New Left Review, vol. 88, July/August 1991, p. 124. Ohkura, ibid., p. 5.

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41 42

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44 45

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50 51

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Zin Sawachika (ibid.) argued that during the boom ‘banks in Japan threw discretion to the wind and started to lend for overseas property purchases … and the Gold Coast became part of this crazy situation’. ‘Thailand’, Merian Heft, vol. 54, no. 12, 2001, p. 12. ‘Yenlords put Hawai’i on shopping list’, Gold Coast Bulletin, 18 May 1988. The Japanese company Cosmo World bought the Pebble Beach resort with its three golf courses and two five-star hotels in September 1990 for $US831 million. Wood, ibid., pp. 61–2. Hawai’i’s share of the total Japanese investment in the United States was 28 per cent (1986–88) and during those two years amounted to $US6.5 billion (Marcia Y. Sakai, ‘Nonresident Investment in Hawai’i’, State of Hawai’i, Tax Review Commission, Working Papers and Consultant Studies, Honolulu, December 1989, p. 325). N. G. Howenstine, ‘U.S. Affiliates of Foreign Companies: 1987 Benchmark Survey Results’, US Department of Commerce Bureau of Economic Analysis, vol. 69, no. 7, pp. 116–40. N. Matsui, ‘Direct investments and competition between the US and Japan’, Journal of the Asia Pacific Economy, vol. 1, no.1, 1996, pp. 39–58. The definitive study of Japanese investment in Australia during the period 1957 to 1985, that is, before the property boom, is that by Edgington. In a book of 294 pages he devoted only two and a half pages to Japanese investment in Australian urban real estate (D.W. Edgington, Japanese Business Down Under: Patterns of Japanese Investment in Australia, Routledge, London, 1990). Department of Treasury: Foreign Investment Review Board (FIRB), Annual Reports. As property transactions below $2 million for commercial property and $350,000 for residential property did not have to be referred to the FIRB for approval, these Japanese investment figures are if anything conservative. The Age, 3 February 1988. The Bulletin, 29 September 1987; Time (Australia), 14 September 1987; Business Review Weekly, 10 July 1987 and 31 March 1988. J.G. Hajdu, ‘Recent Cycles of Foreign Property Investment in Central Sydney and Melbourne’, Urban Geography, vol. 15, no. 3, pp. 246–57; M. Berry, ‘Japanese Property Development in Australia’, Progress in Planning, vol. 41, no. 2, pp. 119–201. T. Kumakura, Japan & its New Dynamics Abroad: Conference Proceedings, 12th August 1987, The Australia–Japan Economic Institute, Sydney, 1987, pp. 45–7.

Chapter 2

‘Australia … so much sunshine … so much space … so cheap.’

KITA-KU, AROUND OSAKA’S Central Station, is the busiest area of this swirling metropolis. An unending stream of people flows past its innumerable shops, restaurants, food stands and bus stops. There are also a number of travel agencies in Kita-ku and in the spring of 1990 each one had racks outside its front door. These racks were filled with colourful leaflets trying to entice the passerby to visit the faraway destinations pictured on them. On top of the racks of three travel agencies was a Japan Airlines leaflet about travel to the Gold Coast. Apart from the inevitable smiling Japanese girl in a bathing suit, its front page featured small inset photographs of the Gold Coast beaches and examples of the swimming, water skiing, boating and such, that can be done there, as well as the holiday packages offered by Japan Airlines. The next page of the leaflet offered further Gold Coast packages, but it was the large photograph in the centre of the page that seemed to convey the most subtle and incisive message. In its top right corner was a yellow logo with a kangaroo and the words ‘Aussie Style’ in both Japanese and English. The coloured photograph showed a close-up of a white chair in front of the blue, shimmering water

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of a swimming pool. On the seat of the chair was a casually draped pink towel with a tube of sunscreen, a pair of sneakers and a paperback book. The words ‘Coca-Cola’ could be clearly read on the laces of the sneakers, as could the title of the book resting on the chair. It was Understanding Hypertension: Causes and Treatments by Timothy N. Caris MD. Travel agents and tour operators obviously seek to produce advertising material that will evoke a positive response from their potential customers. To achieve this, the destination they seek to promote must reinforce the positive image people have of it and also help crystallise hidden longings that people have.1 So it is evocative to conjecture what this Japan Airlines leaflet shows about the Japanese image of the Gold Coast. Its style is bright, colourful and fresh, qualities common in much Japanese advertising.2 The image of the Gold Coast depicted on the leaflet is one of sunshine, leisure and relaxation. The sneaker laces with the words Coca-Cola on them also seem to say that this place is not ‘at home’, but ‘out there’ in the big, wide cosmopolitan world.3 The paperback on hypertension resting on the chair has also not been put there by chance. Perhaps it seeks to evoke the feeling that, in the relaxed atmosphere of the Gold Coast, the Japanese visitors will have the peace of mind to reflect on the stress they are under at home in Japan. In other words, it is possible to argue that the Japanese saw life in their homeland as one fraught with tiredness, stress and tension, from which such travel leaflets encouraged them to escape to a faraway place called the Gold Coast, a place of sunshine, spaciousness and relaxation. The clues found in the above travel brochure point to the general Japanese view of Australia. This was summed up by Tsuneo Sugishita, the Sydney correspondent between 1986 and 1990 of the mass circulation Yomiuri Shimbun, in the following way: Compared with Japan, Australia is like heaven, with its comfortable climate, beautiful beaches and huge land area. I have many friends there and would like to live there again.4

The lure of the Gold Coast The Gold Coast was the place in Australia that had most of these desirable attributes. As the Sydney journalist Paul Coombes quipped: ‘Japanese developers are looking at the Coast to create a Japanese environment with the space to leave bonsai behind.’ 5

‘Australia … so much sunshine … so much space … so cheap.’

33

Perhaps it was all expressed best by a longer-term Japanese resident on the Gold Coast. Her name is Kimiko VanderWal. After completing her education, the adventurous Kimiko had decided to see something of the world and arrived in Australia in the mid1960s. After various other jobs she became a teacher in the newly established Japanese language program at Swinburne University in Melbourne. Marriage to a Dutch-born Australian followed and a few years later they were drawn, like many other people, to the sunshine and economic boom of the Gold Coast. In the late 1980s she became a translator and community worker for the growing Japanese population there. One spring day in the early 90s, sitting in her Broadbeach home with the sun streaming into its spacious lounge room, Kimiko pondered on the magnetism the Gold Coast had for her fellow nationals. She spoke of the world of high prices, crowded cities, and stress from which the Japanese came, then in soft, measured tones she spelt out why to such people the sight of the Gold Coast seemed to be a dream come true:

Gold Coast travel brochure published in Japan. Source: JAL

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They saw the space, the beautiful climate, blue sky day-in, dayout … They were just fascinated and wanted a part of it … They realised how many properties foreigners could buy at such a ridiculous price for the Japanese. They had excess money and they could borrow from the banks so easily … They could live well here … the golf course is so close. In Japan they have to get on a train to get to the golf course and that takes a couple of hours. Here people who love boating can tie-up their boat in front of the house … Some came as business migrants or retired here, others bought a house, or more often a unit, as a second home or as an investment.6

One of these business migrants was Mick Okawa. At the age of 44 in 1988, a mid-life crisis and the breakdown of his first marriage led to the end of his career as a successful businessman in Japan.7 He remarried, started a second family and was enthralled by the picture of the Gold Coast painted for him by a Japanese friend in business there. After his arrival he invested in a number of properties and then had a spacious home architect-designed in the prestigious Paradise Waters area of the Gold Coast. This house of 2,054 square metres, including swimming pool and tennis court, indulged the yearning for space that remains a dream for any Tokyo resident. At the same time, certain Japanese design elements were incorporated into it: a front entrance that is accessed over polished stepping stones set into water, and the prevalence of wall niches to display artworks, a reference to the tokonoma that is a feature of the traditional Japanese house. It was very much a home with Gold Coast dimensions and amenities, but the touches of the imported culture were also visible. Okawa also took part in Japanese community activities and in 1995 was the president of the Japanese Society of the Gold Coast. It was obvious that the Gold Coast had been as good as the image of it created for him by his Japanese friend. Okawa praised its sunny climate, wide-open spaces, long sandy beaches and easy lifestyle. His children were enrolled in a local school and Okawa hoped that they would be educated there in the spirit of Australian multiculturalism, a world view which he greatly admired. He also commented that most of the other members of the Japanese Society of the Gold Coast had the same positive feelings about the Gold Coast: ‘space, beautiful climate, leisure, easy access to sporting amenities, especially golf’.8

‘Australia … so much sunshine … so much space … so cheap.’

35

Japanese holiday-makers and newly arrived residents enjoyed the Gold Coast golfing complexes and spacious beachside resorts which used space in a way that was not possible in the densely populated environment of Japan. Those with the most money had houses of a size built that they could only dream of back in Japan. One or two such Japanese built homes were worthy of extensive comment, even by the ostentatious, extrovert standards of the Gold Coast nouveau riche. For example, Toshiaki Ogasawara, a wealthy businessman, built a huge house at Nerang which had its own golf course. Total cost: $4.1 million. Plans were also drawn up for a 650 square metre mansion to be built on Admiralty Drive, Paradise Waters, for Noritaka Tange, the architect son of Japan’s most prominent twentieth century architect, Kenzo Tange.9 The ability to wallow in something that in Japan was just not available also led to some amusing if not bizarre incidents. A Japanese family bought a 50 square metre house in the Sanctuary Cove Resort at the northern end of the Gold Coast. As they had only recently taken possession of the house, the people living in the homes next door had not made contact with them. One night a neighbour heard a noise from the house and rang the Sanctuary Cove security guard to investigate. The guard entered the house and found three generations of the Japanese family, 15 people in all, huddled together on futons in one room. The rest of the huge house was dark and empty.10 Even those whose Gold Coast investments and planned tourist projects had struck difficulties were very happy to live there. The space, the relaxed environment and the ease of access to amenities they valued above anything.11 As one such Japanese investor commented: ‘This is the best place to live in the world. I have my family here, my children go to school there. It’s just not been much good for my business’.12 The Gold Coast was particularly attractive for those Japanese who did not seek to earn a living there. These were mainly older people, a group one would think would be most hesitant to venture outside the confines of the cocoon of Japanese culture. However, by the late 1980s, there were some who had broken out of this psychological mould. This was because of the increase in the number of Japanese who have had careers that took them outside Japan for longer periods of time and who were more confident in speaking English. Most of these people were from Tokyo or

36

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Osaka-Kobe, so they were very aware of what life was like in a large, noisy, stressful metropolis. This made the Gold Coast an attractive consideration for their retirement. Such Japanese had rejected the insular mentality for which many of their compatriots were known. They were much more cosmopolitan in outlook and very interested in moving to a place with much more space, sunshine and easily accessible golf courses than anywhere in Japan. Even the fact that they had little chance of graduating from a temporary visa that had to be renewed every four years to the status of permanent resident, did not deter them. The late 1980s saw the beginnings of a trickle of Japanese retirees settle on the Gold Coast, a trickle that has continued ever since and is estimated to be a couple of hundred per year.13 It is with this group that much of Kimiko VanderWal’s community work was conducted. It is interesting to give some estimate of the size of this permanent Japanese presence on the Gold Coast. At the 1981 Australian census there were 203 Japanese living on the Gold Coast. Ten years later, in 1991, the number of Japanese had risen to 2,448. A year or so later a local journalist estimated there were about 3,000 Japanese living there.14 So, even after a decade of migration to the Gold Coast, the Japanese community was still just under one per cent of the total Gold Coast population. Hardly a flood. It is, however, their ‘differentness’ in a city much less cosmopolitan than Sydney or Melbourne and the flows of money with which their arrival was linked that made the Japanese presence such an instant talking point; and they were certainly enthusiastic about coming to a place that they regarded as being close to paradise. The Japanese image of the Gold Coast could best be summed up by the slogan of ‘Space, sunshine and security’. And the Gold Coast travel brochures and the investment seminars were doing their best to crystallise and reinforce this image in the Japanese person’s mind.15 Creating a desirable image of Australia was a competitive exercise. Prior to their first visit to Australia, many Japanese had already visited Hawai’i and, in some cases, California. These were destinations which also offered similar enticements. It was therefore a matter of making them aware of what extra attractions, above and beyond those offered by Hawai’i, a stay on the Gold Coast —

‘Australia … so much sunshine … so much space … so cheap.’

37

and perhaps the purchase of real estate there — would offer. In this process of persuasion, the novelty value of Australia played a prominent part. As the Gold Coast architect, Des Brooks, commented: I think that Australia was a new sort of flavour for a lot of them [i.e. Japanese], and with our lots of land … Hawai’i has too big a Japanese population, that made some of them feel inhibited … and we are more or less in the same time zone as Japan, that meant they could keep in touch with their business back in Tokyo … [in the 1980s] we were starting to get the new flights into Brisbane and the Gold Coast, the airports were improved. They came and changed the Gold Coast for all time.16

The attractive Australian lifestyle qualified by its work ethic Perhaps one should not be surprised that Australia held this fascination for the Japanese. Are we not all drawn to environments that are very different from those we have around us in our everyday lives? Australians are enthralled by the history which they find in London and Paris; so, similarly, the big skies, bright sunshine and exotic animals and plants would enthrall the Japanese visitor to Australia. As Toshi Watanabe, Japan Manager of the Queensland Tourist and Travel Corporation, put it: ‘I don’t want the Gold Coast to become a Japan. I want it to retain its own atmosphere.’17 However, what was much more surprising was the appeal that Australian behaviour and ways of living also had for the Japanese who became familiar with the Gold Coast. Mick Okawa praised the friendliness and informality of Australians. He felt that its open, multicultural society would give his children the right values for the twenty-first century. He was very happy that they had the opportunity to go to school on the Gold Coast and spend their most formative years in such a cultural environment. Kimiko VanderWal saw this more at the neighbourhood level. She said that people from Japan who had bought houses in one or other of the residential estates appreciated the kind deeds of their neighbours. They felt keeping to oneself was far too much the Japanese custom and the casual friendliness and helpfulness of their new Gold Coast neighbours was a very pleasant surprise. This they valued highly. On the other hand, life on the Gold Coast afforded them much more privacy than the social pressures back in Japan would ever allow. The need to make decisions in neighbourhood

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associations, the pressure to participate in communal activities and the constant round of donations that they said were expected of them in their daily lives in Japan were things they were happy to leave behind. There was also the cost of the constant stream of presents that had to be bought for relatives and friends on all occasions. These were common complaints according to Kimiko, and the higher your social status, the larger the present expected of you. ‘If you don’t do those things [buying expensive presents], people talk behind your back,’ they told her.18 In Australia the Japanese felt a great sense of freedom. One Japanese Gold Coast resident said she felt as if there were ‘unseen walls’ surrounding her in Japan. This was her way of referring to what was expected of her in her behaviour and appearance. As a woman of middle age she had to conform to a conservative dress code: ‘Women beyond a certain age cannot wear bright colours. People don’t say anything to your face, they just criticise you behind your back. Here on the Gold Coast I can wear red, yellow or whatever I want …’ So, on the Gold Coast they felt liberated from the social conformities of Japan. Therefore the appeal of Australia was not only its environment, space and climate, but its lack of social rigidity, tolerance and casual friendliness of its people. Alex McRobbie, a Gold Coast journalist with many contacts in the local Japanese community, put it this way: ‘The Japanese here are fascinated by the casual Australian lifestyle. What is more, it seems to be rubbing off on them. They go around in casual clothes, develop overt mannerisms, show affection in public. It’s quite incredible.’19 It is not surprising that the lifestyle of Australia was particularly appealing to the younger Japanese who came to the Gold Coast. Apart from the tourists on short holidays, there were those who got working visas and took jobs, many in Surfers Paradise duty-free shops, large hotels, restaurants and as guides on coaches taking their fellow compatriots on day tours. Some combined earning money with doing English language courses at the local TAFE college. The ease of social contact with young Australians had special appeal for Japanese on such working holidays on the Gold Coast. They liked Australian friendliness and the escape from the social obligations back home.20 Apart from which, the opportunities for swimming, surfing, water skiing, skin diving and other marine sports were a dream come true. The appeal of Australia to the rapidly growing

‘Australia … so much sunshine … so much space … so cheap.’

39

Japanese surfing fraternity deserves special mention. The young Japanese, drawn to the Gold Coast by their love of water sports, referred to Australia as the land of an ‘endless summer’. This was a place where they could enjoy a free life with no one reminding them of careers, duty and social obligations. At the end of their stay most would return home and slide into the social groove for which they were predestined. The most distinct group of young people coming from Japan were the surfers. Previous contact or images of Hawai’i and southern California led to a rise in interest in surfing among young people in Japan. From the late 1980s they started coming to the eastern coast of Australia, to Sydney, but more particularly to the Gold Coast. Even the multiple recessions of the 1990s which Japan experienced did not affect this flow. By the late 1990s there were a couple of hundred young Japanese surfers on extended working holidays on the Gold Coast.21 Around Surfers Paradise they were seen as a distinct group. They shared flats and found night jobs in restaurants and such to leave their days free for surfing. Others were able to get extended working visas through their employers’ sponsorship. These employers were often the owners of surf gear shops who did a brisk trade with young Japanese tourists buying surf boards that cost anything up to $1,200. Hence, having a fellow national behind the shop counter was a valuable asset. These local surf shops even organised annual allJapanese surfing competitions. So, from the early 1990s, a distinct Gold Coast Japanese surfing sub-culture was starting to make itself felt. The Australia of sunshine, surf and the free lifestyle was in all ways becoming a highly marketable commodity. The large Japanese investors in the Gold Coast tourist industry and the local property market also made their investment decisions with this kind of picture of Australia at the back of their minds. In some cases, however, they soon realised that the truth about Australia was a little more complex.

President of the Japanese Society of the Gold Coast, Mick Okawa, with the author. Source: Mick Okawa

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These Japanese individuals and company representatives arrived on the Gold Coast with a view of Australia being a country not only of environmental spaciousness, sunshine and ease of social contact, but also a place of big economic opportunities. In other words, environmental attractiveness was matched by economic attractiveness. Some were no doubt influenced by their investment experience in Hawai’i and California. They saw Australia as a large and ever growing market with the people being open to contact with and dealing with Asians. The lack of up market, five-star tourist and residential amenities on the Gold Coast was something that surprised them, but they quickly saw it as their biggest market opportunity. If Japanese investors could finance such projects in Honolulu and Los Angeles, why not also on the Gold Coast? Potential development sites and existing property in Surfers Paradise, Broadbeach and Main Beach was only one quarter to a third of the price of that in Tokyo. At first sight, the obvious environmental appeal of the Gold Coast was definitely matched by its investment potential.22 The Japanese investors did, however, have some difficulty accepting certain features of the economic environment. One of these difficilties was to do with the Australian world of work. Unfortunately, the popular Japanese image of a friendly, easy-going people living an effortless life on a giant continent was not the entire picture. They came to see labour regulations as rigid, particularly those that pertained to the setting of wages, working hours and the national arbitration system. Initially, these laws, guidelines and practises were not understood by the Japanese investors, and, once they were, aspects of this employer–employee culture were seen as obstacles to the efficient construction and running of their Gold Coast projects. The timing of the arrival of Japanese investment capital did not help. From 1986, the flood of Japanese money was fuelling a dizzy Gold Coast property boom. In response, the labour market there became particularly tight and demands of workers were more difficult to resist. The approach of Australian unions was sometimes seen as being too rigid and generally not as co-operative as the more hierarchical and corporatist Japanese companies were used to back home.23 There were also a few Japanese who at times implied that the easy-going Australian manner also extended to Australian attitudes to work.24 In other words, Aussies didn’t work hard enough, or were too

‘Australia … so much sunshine … so much space … so cheap.’

41

phlegmatic about details. Here, the saga of the laundry water outlet can be related as a whimsical vignette that made its pertinent point. The developer of the Rivage Royale apartments at Southport used this story to illustrate her objections to the ‘She’ll be right’ attitude of Australians. After explaining in considerable detail how her company set a high store on quality and precision of detail in all aspects of the project, she found it hard to persuade an Australian builder and plumber to put the water outlet hole in the centre of the laundry floor rather than at the side. A water outlet in the centre of the laundry floor appealed to the Japanese sense of order, and if it cost more, so be it, she told them. However, her Australian tradespeople couldn’t see why she was making an issue of it, ‘She’ll be right … wherever we put the outlet, why make a fuss …? 25 It also has to be remembered that the Japanese investing in Australia came from a politico-economic system in which there was a tight connection between government and business. This was based on a consensus that it was a national task to facilitate investment to increase production and so further exports. Hence, the role of government was to underpin the investment and export strategies of major Japanese companies. The fact that in Australia investment decisions were seen as essentially individual company decisions to which governments may or may not give financial support in one way or another, perplexed the Japanese business person coming from a corporatist culture. The academic and parttime student of Australian society, Teruhiko Fukushima, expressed the Japanese perspective in the following way: ‘There should be a certain level of government intervention to guide Australian business towards more aggressive and strategic investment.’26 He found this lacking in Australia. The Japanese did not agree with the Anglo-American culture of liberal, laissez faire capitalism of which that practised in Australia was a variant. Representatives of individual Japanese companies expressed this view in more specific ways. They all saw the need for Australia to encourage overseas tourism to its shores. Needless to say they were very interested in being major investors to help further the Australian tourist industry. But they felt there was no long-term strategy by governments in Australia to make this happen. ‘You can’t sit back and assume that everything is going to work itself out … there are problems of infrastructure, union attitudes, investment

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policy … and without help of governments at all levels these problems cannot be overcome.’27 The fact that when governments in Australia did act and introduced a policy, they then sometimes became overly pragmatic and chopped and changed it at frequent intervals. This in turn also drew criticism from some Japanese business people in Australia.28 So it is fair to say that on the whole, the Japanese were drawn to Australia, and especially to the Gold Coast, by the beauty of its environment, its wide-open spaces, blue skies and its opportunities for sport and leisure activities. The very favourable exchange rate between the yen and Australian dollar that had existed since 1985 helped them realise their dream of a visit, or even the purchase of property at prices unheard of in the Japan of the 1980s bubble economy. The attraction for the Japanese of the Australian way of life, with its more relaxed and informal pattern of appearance and behaviour, was much more surprising. Those who settled on the Gold Coast or came for extended stays quickly adapted to it. In fact, some of it rubbed off on them. The investors would have liked to have seen more of a symmetry between the ‘grandness’ of the Australian environment and wide-open business opportunities which they assumed it offered. However, here they were confronted by the differences between their business and political culture and that of the Australia of the late 1980s. Given the economic ebullience of Japan at the time, this did not deter them from making large investments on the Gold Coast. The result was an investment binge the like of which the Gold Coast had never seen. What this was, who did it and what it produced are the themes that will be addressed next.

‘Australia … so much sunshine … so much space … so cheap.’

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Footnotes 1

2

3

4 5

6 7 8

9 10

11

12 13

14

J. Urry, The Tourist Gaze: Leisure and Travel in Contemporary Societies, Sage, London, 1990, p. 3. M. Ivy, ‘Critical Texts, Mass artifacts: The Consumption of Knowledge in Postmodern Japan’, in M. Miyoshi & H. D. Harootunian (eds), Postmodernism and Japan, Duke University Press, Durham and London, 1989, p. 36. Perhaps the Coca-Cola Corporation paid the advertisers for its name to be used to achieve this effect. Tom Ormonde, ‘Large, lucky and lazy’, The Age, 18 August, 1990. Paul Coombes, ‘Tourism, the Gold Coast and the Japanese acid test’, Rydges, vol. 59, no. 12, December 1986. Interview held on 12 October 1993. Interview in Surfers Paradise, 27 June 1995. A survey conducted by the Japanese Society of Gold Coast Inc. in July–August 1995 found that the main attractions of the Gold Coast to the Japanese who had settled there were ‘Nice environment’, ‘Climate’, and ‘Easy lifestyle’, in that order. About half of those surveyed had visited the Gold Coast as tourists before they decided to settle there. The rest were so fascinated with it that they bought property during their first visit. Sunday Telegraph, 6 April 1997; Gold Coast Bulletin, 3 June 1991. Personal communication, Eliza Macrossan, Property Manager, Discovery Bay Developments Pty Ltd. The importance of these features have been confirmed by the work of other researchers. For example, Mitzukami’s study of selected Japanese who lived in Brisbane (T. Mitzukami, Integration of Japanese Residents into Australian Society: Immigrants and Sojourners in Brisbane, Japanese Studies Centre, Monash University, Melbourne, 1993), also the discussion in English of Suzuki’s book Nihonjin No Oossutorariakan (Australia through Japanese eyes), in K. Yoshimitzu, ‘A view from within: Perceptions of Australia among Japanese living in Queensland’, in R. Mouer, (ed.), Japanese Images of Australia, Asia Institute, Monash University, Melbourne, pp. 39–46. Both studies identified space, sunshine and relaxation as the most important conponents of the Japanese image of Australia. Isamu Okada, Jimna Ltd. Peter Wear, ‘Land of the setting sun G’day cobber san: Japanese retirees are migrating to Australia in rapidly increasing numbers’, The Bulletin, 7 May, 1996. Personal communication, Alexander McRobbie, 23 September 1992.

44

15

16 17 18

19 20

21 22

23

24 25

26 27

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If Australia’s exotic flora and fauna is added to these environmental and lifestyle attractions, then Australia, especially the Gold Coast, would lure even more Japanese, according to Nobumaru Shindo, International Director, Department of Tourism Tokyo (Gold Coast Bulletin, 11 July 1989). Interview held in Southport, 28 June 1995. Gold Coast Bulletin, 13 February 1988. The need for a bridal couple in Japan to reciprocate the present given to them at their wedding makes weddings particularly expensive. This was one reason why getting married overseas became so popular for Japanese in the 1980s. The Gold Coast benefited from this trend. Personal communication, 23 September 1992. Interview with Keiko Takama and Masatosha Ito, in Gold Coast Bulletin, 29 April 1987. Frank Robson, ‘Dropping in’, Good Weekend, 19 February 2000. Personal communication with Sue Willgood, Ray White Pty Ltd, Neville Hayes, PRD Realty Pty Ltd, and Peter Sterling, Daikyo Kanko Corp. Tatsuo Akachi, ‘Daikyo Kanko — Our Approach’, The Valuer, April 1987, pp. 460–62. ‘Attack on Aussie ethics’, Gold Coast Bulletin, 7 September 1992. Interview held on 10 April 1994 with Chizuko Nakandakari, Managing Director, Maruko Australia Pty Ltd. The Age, 18 August 1990. Tatsuo Akachi, ‘Tatsuo fears a tourist trade drought’, Gold Coast Bulletin, 15 August 1986. ‘Attack on Aussie ethics’, Gold Coast Bulletin, 7 September 1992.

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Chapter 3

Japanese investors: doing it their way on the Gold Coast

THE FOCUS OF the northern half of the Gold Coast is a stretch of water called the Broadwater. This is fed by the meandering Nerang and Coomera Rivers and is largely shielded from the Pacific Ocean by a series of sand islands that onshore drift and tidal action constantly remould. Beginning in 1842, European settlement of the Gold Coast commenced around the mouth of the Nerang River and on the landward shores of the Broadwater. By the early 1980s, much of this area was built up from Southport northwards, with canal estates sprouting to the north. The Broadwater itself had become a mecca for swimmers, water skiers and the boating fraternity.1 By the time the flood of Japanese investment capital arrived on the Gold Coast, local developers were well on the way to reforming much of the suitable Broadwater coast into canal estates.2 Where else such potentially lucrative developments could occur was not immediately obvious. However, the famous Gold Coast entrepreneurial spirit was not to be daunted. The eyes of some developers hit upon the sandbars, shoals and mudflats that were strung out like a north–south ribbon in the Broadwater. One of these was just half a kilometre off the coast at Paradise Point.

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It was called Ephraim Island and its fate during the Japanese investment boom can be said to symbolise much of what happened during that frenzied half decade. Ephraim Island had been crown land over which Gold Coast developer Jim Hansford was given a five-year lease in 1972 for an annual rental of $20 a year. The condition was that he clear, dredge and stabilise the land, and develop $40,000 worth of accommodation and recreational facilities on the island. Four years later, the lease was converted into freehold for the princely sum of $1,830.30.3 At the beginning of the 1980s boom the 9.6 hectare Ephraim Island was bought by the up-and-coming Gold Coast developer, Jim Raptis, for what at the time appeared to be the huge sum of $7 million. He had grand plans for its development. Raptis spent a million dollars building a 450 metre bridge with neo-classical balustrading in the Venetian style to connect Ephraim Island to the mainland. He also commissioned plans for a large residential/tourist development on the island. In keeping with the Mediterranean theme of his apartment projects in Surfers Paradise and Broadbeach, Raptis rechristened his new acquisition Odyssey Island.4 However, in October 1989, before any development of Odyssey Island had occurred, an offer too good to refuse was made for the island by the K. K. Alpha Corporation of Tokyo. This company had originally owned a shipping line, but, during the 1980s Japanese bubble economy, it had diversified into golf course and tourist resort developments within Japan and Hawai’i.5 It was flush with credit and was very keen to extend its resort chain to favoured new locations such as the Gold Coast. Its plan was to build a chain of exclusive resorts around the Pacific basin to which memberships would be sold. As negotiations proceeded, the vendor could not believe his luck. Peter Lacey, the Director and Development Manager of Raptis Group, was carried away by the sums of money the Japanese buyer seemed to be talking about: ‘I nudged Jim [Raptis] under the table when the Japanese made their offer. We just couldn’t believe what we were hearing.’6 K. K. Alpha Corporation bought Odyssey Island for $43.5 million. A rise in price from $1,830.30 to $43.5 million in 13 years, even given the improvements that had been made to Odyssey Island, astounded the seasoned participants of the Gold Coast property market. The new owners proposed to completely re-form the island to the shape

Doing it their way on the Gold Coast

47

of a horseshoe. Inside the centre of the horseshoe was to be a five-star hotel/resort surrounded by water. The proposed hotel was to be Venetian in architectural style with huge rooms averaging 54 square metres in size. Five footbridges were to lead the guests to a 2,500sq metre swimming pool. The arc of the horseshoe-shaped sliver of land was to be the site for 300 condominiums and an 80 berth marina. The Raptis Mediterranean style was to be continued and embellished. Cost: estimated at $400 million.7

Developers, deals and a culture of rivalry If this deal weren’t enough, the Raptis Group also sold two other of its developments to Japanese buyers: the Forum Shopping Centre on Orchid Avenue in Surfers Paradise coupled with the adjacent Paradise Avenue office building and, most spectacularly, its just completed Raptis Plaza. The latter development is in the pivotal location of Surfers Paradise where Cavill Avenue and the Esplanade along the foreshore intersect. In the late 1980s, Raptis Plaza, with its barrel vaulted ceiling, sky domes, lavish use of Italian marble, 45 shops, five restaurants, night club and offices was the ‘state of the art’ building in central Surfers Paradise. The focal point of its food court was a $200,000 full-size replica of Michelangelo’s David carved from a 33 tonne block of Carrara marble. Raptis Plaza had only been completed for a matter of months when the Japanese housing and condominium developer, Dia Kensetsu, pressed Jim Raptis to sell. Dia Kensetsu had no sense of negotiation at all, something it could have used to its advantage in a property market that was showing signs of levelling off. It just wanted to buy, and buy quickly.8 With site purchase and development costs at close to $100 million, the vendor thought he could push Dia Kensetsu to ‘about $108 or $110 million’.9 The deal was settled at $128.5 million. Jim Raptis couldn’t believe his luck.

Chizuko Nakandakari, who managed the construction and marketing of the Rivage Royale. Source: Courtesy Courier-Mail

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Raptis was quick to see and appreciate the beneficial effect of the Japanese presence on the whole Gold Coast: … without them the Gold Coast would not have developed the infrastructure of an international resort … BHP and AMP would not have invested like the Japanese. They would not be prepared to adopt the Japanese approach and sit on their development for years and await returns.10 What helped the Japanese no end, of course, was the fact that with their long credit lines in Japan they were flush with low interest money to an extent that Australian companies could only dream of. On the Gold Coast, they bought quickly and they bought at the top of the boom which they had helped fuel. People in the property industry regarded them as the most competitive and aggressive investors they’d seen. They were regarded as always wanting the biggest and best in what they bought or built.11 The Japanese saw the property assets they were keen to accumulate on the Gold Coast not just as having economic utility, but also as symbols of their owner’s or their company’s status and success. It is true to say that success (not just in Japan) is often seen in a competitive sense; people see their achievements in relation to those of their parents, peer group or competitors. Japanese society has been traditionally very group centred, and Japanese scholars have argued that it is through the group that the competitive ethic is manifested.12 In the case of property investment in the late 1980s, it was the family companies and even more the corporations, in whose behaviour this competitiveness was seen. They had always behaved in a very competitive manner in Japan, but now the way of doing this was through the accumulation of property assets in a foreign country. The Hawai’ian, Californian, Thai, South Pacific, Gold Coast and even European, real estate or tourist property investment became their symbol of success. It was in this way that the company gained prestige in the eyes of its competitors in Japan. It was so easy to tap investment capital in Japan that purely economic considerations were often treated as if they were of less importance than gaining the approbation of your prestigious business rivals. Gold Coast real estate agents and property consultants were very surprised that in many cases Japanese companies made their decisions to buy or build without having done any market research.13 Considerations of cash flow and the timing of the placement of the

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new development on the market in relation to whether property prices were going up or down were often ignored. In other words, the financial planning of income streams from their projects was also at best rudimentary. For example, local developers of residential/ resort projects were very aware of the need to complete and market the residential component of the project as quickly as possible. Funds from the sale of such houses would then help fund the golf course facilities and other infrastructure that followed. Japanese investors could only think as far as the 18 hole golf links and luxurious clubhouse, and these were not the components of the project that gave the quick returns. As Geoff Burchill, a prominent Gold Coast consulting engineer and planner, commented: I think they primarily wanted a golf course … and the concept of the residential buildings was more or less, from the Japanese point of view, an afterthought. It was something they’d do after they built the golf course, it wasn’t seen as a total project in itself. The golf course was the main issue and, strangely, the cash flow was coming from the land development and that they left till last.14 The high status of golf in Japanese business culture was obviously a strong influence on such an attitude, an attitude for which these Japanese property investors would pay dearly in the dramatically changed economic climate of the 1990s. But, in the heady days of the late 80s, company competitiveness and the quest for status was a major driving force of overseas Japanese property investment. For example, the three largest, architecturally most striking and lavishly appointed high-rise apartment buildings funded by Japanese money on the Gold Coast were the Grand Mariner, Rivage Royale and Belle Maison. People in the local property industry and local commentators referred

Rivage Royale on the banks of the Nerang River in Southport. Source: Maruko Australia Pty Ltd

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to these buildings as ‘ego-trips for their company directors’. An account of one of these projects, Rivage Royale, is an enlightening episode of Japanese investors’ wealth, company ambition, and the cultural aspirations they brought with them from Japan. In the 1980s there was a strip of land on the banks of the Nerang River just west of the Gold Coast Bridge, which links Surfers Paradise and Main Beach with Southport, that development appeared to have bypassed. It was overgrown and neglected. In fact, it was somewhat of a rubbish dump onto which a great array of bits and pieces had been flung over the years. In the late 80s, a stream of Japanese company representatives reconnoitred the Gold Coast to seek out property investment opportunities. One such representative had celebrated a little too well at a Gold Coast restaurant and got lost on his way home, and in his inebriated state he stumbled onto this site. The darkness veiled the details of what was around him, but showed the Surfers Paradise skyline in the background at its luminescent best. He immediately saw the development potential of the site, and so recommended that his Tokyo-based company, the Maruko Corporation, buy it. This Maruko Corporation did in 1989 with the aim of constructing a luxury high-rise apartment complex. The next piece in the explanatory jigsaw of Rivage Royale is provided by a large colour photograph on the front page of the Gold Coast Weekend Herald of 13 January 1994. It shows a young Japanese woman sitting upright on a sofa in front of a Christmas tree. She is beautifully groomed with pearl earrings, a bouffant hairstyle, and is wearing an off-the-shoulder crushed silk ballgown with puffed sleeves. Her sparkling eyes, pearly white teeth and bright smile instantly attract the attention of the viewer. Her name is Chizuko Nakandakari. In October 1990, Chizuko became the Managing Director of Maruko Australia. This was the subsidiary company established by head office to convert the unkempt site on the banks of the Nerang River into the most luxurious high-rise block on the Gold Coast. The choice of an attractive, photogenic young woman as managing director immediately ensured that the Rivage Royale project would have no difficulty getting publicity.15 The media spoke of her as ‘sophisticated, demure, charming … [and] … with a finely honed intellect and work ethic moulded by the influences of traditional and modern-day Japan’.16 With introductions like that, her image was close to perfect, and the

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project whose design, construction and marketing she guided soon became the talking point of the Gold Coast. The statistics show the scope and cost of Rivage Royale. It had 29 storeys, contained 178 apartments and cost $120 million. The Japanese desire for space was an obvious defining feature of the project. ‘We are selling space. Space is what Australia has to offer an Asian person,’ commented Ms Nakandakari.17 Even most two bedroom units were over 200 square metres in area, and the building was topped by five floors containing 26 ‘Sub-Penthouses’ of between 358 to 720 square metres, and three floors of penthouses of 836 square metres each. Chizuko Nakandakari saw herself marketing a ‘dream’. A dream of exclusiveness, luxury and privilege. ‘Let them [the buyer] understand the Rivage Royale lifestyle,’ she said. The neo-classical style swimming pool with its mosaic tiles, marble columns, potted palms and domed relaxation alcove was seen to encapsulate it all. As the marketing brochure gushed: The Romans started it. Cleopatra refined it, Rivage Royale revived it … The early morning dip will never be the same again. Even without the goat’s milk, the sumptuous pleasure of plunging into tingling crystal water surrounded by Romanesque pillars and light domes is sheer delight … In every way, Rivage Royale rises to new heights in ecstasy, for this is not simply a high-rise. Rivage Royale is the height of good taste. The standard that overshadows all.18 In general the features of the Rivage Royale development were to reflect the symbols of affluence and success in Western culture. Nakandakari mentioned with pride that her company’s high-rise building had used about one and a half times as much marble as any other comparable high-rise on the Gold Coast.19 Marble is

A display apartment in the Rivage Royale. Source: J. Hajdu

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unknown in traditional Japanese building, whereas it has had an important role in Western architecture. In the Western cities, marble has meant opulence, as well as solidity, durability and tradition, but the stone is not found in Japan, so the builders of traditional Japanese cities had not heard of it. This leads to the question: Why would a Japanese developer regard its use as so desirable? There is the school of thought that argues that the Japanese have frequently copied a prestigious Western style, only to use it in an eclectic way that surprises the European or American observer.20 So, as the president of the Maruko Corporation appeared to have felt, why not appropriate the Western symbols of solidity, durability and opulence in the building of a lavish apartment block? Use a lot of marble. A similar attitude seems to have been at work in the choice of architectural style for the Rivage Royale. Chizuko called the style of her building ‘Californian’. As a Gold Coast architect commented: ‘It’s not their [Japanese] style, it’s their interpretation of what was desirable at the time, and this they got from international architectural magazines and personal experience in other parts of the world.’21 Maruko Corporation had had some experience in designing and developing similar projects in California. But more importantly than that, California was the sunbelt symbol of the dominant world culture of the late twentieth century, and it was such sunbelt qualities that had attracted Japanese investors like Maruko Corporation to the Gold Coast. The ironic fact in all this was that the Californian style was a transposition of Greco-Roman features from Spain via colonial Mexico to California. However, the hybrid nature of this architectural style would only be of concern to an observer steeped in the history of Western architecture, not to a Japanese investor or home buyer.22 There were two other features of Rivage Royale that also added to the iconic quality desired for it by its Japanese developer: its shape and its landscaping. Rivage Royale curls along the shores of the Nerang River in the shape of an ‘S’. The president of the Maruko Corporation was thrilled with this shape, as, to him, it symbolised a surging wave.23 So, if its height and mass had not already made it a spectacular landmark in its low-rise environment, then its shape had certainly made it stand out; particularly as between the 12th and 14th floors the façade of the dominant swirl of the ‘S’ was broken by two semi-open spa pool areas, and the top of the building was crowned by a roof feature in the shape of a tiara.

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According to Chizuko Nakandakari the nature of the landscaping was basic to the image and marketing of Rivage Royale. She sought to clothe the marketing strategy in a philosophical cloak using the concepts of ‘Water’, ‘Land’ and ‘Garden’. Water was pumped from the Nerang River to the highest point on the development site from where it traversed the landscaped area by tumbling through a series of garden falls, indoor falls, then through the outdoor swimming pool before going back down to the river. Water was made the integrative element of the landscaping; in this way a subtle prepackaged landscape was created, rather like the typical Japanese garden. This was the finishing touch to the Maruko Corporation’s Gold Coast icon.24 It was all part of the ‘lifestyle dream’ that Chizuko Nakandakari used her personality, public presence and skills to market conscientiously for seven years between 1990 and 1997.25 Japanese company ego and competitiveness were seen at their most striking with golf and golf courses. In 1983, Shuji Yokoyama, the president of Daikyo Kanko Corporation, visited the Gold Coast and decided that the place did not have a golf course of sufficiently high standard. He felt his company was best placed to give it one. A prominent Gold Coast firm of planners and consulting engineers was commissioned to assemble a development site for a golf course resort development. This they did at Carrara, and, in March 1985, Daikyo Kanko Corporation bought it. After spending $10 million, Daikyo Kanko Corporation opened the Palm Meadows golf links and clubhouse in 1987. The luxurious clubhouse became a beacon for the whole flat site behind Broadbeach. Its style had features of the south seas loggia and copied Japanese roof lines. It included all facilities, including a luxurious restaurant, as well as a Japanesestyle bath house and sauna. The attraction of the Japanese bath house was that it was possible to soak in the sit-up bath while watching through a one-way window as players on the 18th green putted out. The building was fringed by palm trees and sat on a rise next to an artificial lake. Yokoyama could boast that, ‘for the first time just 10 minutes from Surfers Paradise, is a world-class public golfing facility catering to holiday-makers and local residents’.26 However, to just have the best course was not enough. It needed to be part of the worldwide championship circuit. The company decided to fund the ‘Daikyo Palm Meadows Cup’. The first was held from 28–31 January 1988, and had $500,000 in prize money

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attached to it.27 As a result, the ‘Who’s who’ of world golf flew into the Gold Coast to take part. Full page advertisements appeared in the Australian metropolitan press featuring Greg Norman teeing off in the foreground, with the Palm Meadows clubhouse and resort landscape clearly visible behind him. During the tournament, Yokoyama was there to act as a generous host to all the participants and spectators. Within a year, two other large Japanese companies were set to vie with Palm Meadows. EIE responded to Palm Meadows by attracting Ian Baker-Finch to be ‘the Face’ of its Sanctuary Cove golf course resort. At the beginning of 1989, they announced in a blaze of publicity that the Australian Golf Digest had rated the Sanctuary Cove golf course as number 13 out of the top 100 in Australia, while Palm Meadows was only number 29!28 In 1993 the Shinko Corporation’s Hope Island golf course resort opened. It had been designed by Peter Thomson, the doyen of Australian golf and five times winner of the British Open. The March 1994 issue of Australian Golf Digest rated the Hope Island course as number one in Australia. From then on Hope Island Resort publicity was headed ‘Live on Australia’s No. 1 golf course’. Shuji Yokoyama had really started the competitive quest. But then Shuji Yokoyama had started the whole large wave of Japanese property investment on the Gold Coast.29 The Daikyo Kanko Corporation was a Tokyo-based company established as a family company in 1960. Initially, its main business was real estate brokerage and the operation of small hotels. However, during the decades that followed, as more and more Japanese flocked to the major cities, Daikyo Kanko Corporation saw opportunities in the booming demand for apartments. Yokoyama decided to become a developer. This was so successful that by the late 1980s it was almost impossible to walk around Tokyo without seeing apartment buildings emblazoned with the Daikyo Kanko Corporation signature, a huge coat of arms and the name ‘Lions Mansion’ on top of them. From 1978 onwards, Daikyo Kanko Corporation was the leading apartment builder in Japan.30 In the second half of the 1980s, the rise of national affluence and the increase in holiday travel encouraged the company to enter the resort market. In Japan it built two 18 hole golf courses as well as a ski resort. The rise in overseas travel by the Japanese and the ease with which banks gave credit encouraged Yokoyama to expand into tourist and residential property around the Pacific basin.

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The share price of Daikyo Kanko Corporation on the Tokyo stock exchange was a mirror of this company’s success. The average price for the year of a Daikyo Kanko Corporation share rose from 1,380 yen in 1982 to 2,950 yen in 1984. Its shares peaked on 10 November 1989 at 6,510 yen. Needless to say, the fortunes of its president matched those of the company. In 1987, the Tokyo correspondent of Business Review Weekly gave an estimate of Shuji Yokoyama’s wealth. He put the value of Yokoyama’s 30 per cent stake in the publicly listed side of Daikyo Kanko Corporation at $A850 million.31 Yokoyama’s first foray into Australian investment was the purchase of a 106 hectare cattle property at Kilkivan in Queensland’s South Burnett district. He first visited the Gold Coast in 1972, and, when he returned a decade later, he was surprised at the development. He said that it reminded him of Hawai’i ten or fifteen years earlier. By the late 1980s, about five million Japanese tourists were travelling overseas every year, and Yokoyama felt that, with world-class facilities, the Gold Coast could attract a rapidly increasing share of these.32 So Shuji Yokoyama, a jovial, energetic man of about 60, made up his mind to become a major player in the Gold Coast tourist industry. In 1983, Daikyo Kanko Corporation bought a Surfers Paradise development site on which he decided to build a hotel. Although at this stage the Gold Coast did not have a hotel at the five-star level,33 Yokoyama saw the future of the Gold Coast as an international holiday resort, and so he automatically assumed that his company’s hotel project would be at the five-star level. Nothing but the best would do. Initial designs were drawn by a Tokyo architectural firm, but Des Brooks, of DBI Design Corporation in Southport, was engaged to refine the design and see the project through the construction phase. Years later, Des Brooks related with gusto the proceedings between himself and Shuji Yokoyama: When they bought that site [in Surfers Paradise], the Daikyo people came to us. They had their black suits on, and there we all are around the conference table, then they put the drawings done by a Japanese firm on the table. We found them so sterile. They did not relate to the site at all. Then one of them said: ‘What do you think of site?’ I said it’s a second class site. ‘Oh Mr Brooks, if site second class, then your job is much harder,’ laughed Mr Yokoyama. I thought I can work with this guy … with his sense of humour and so … When we finally completed the Gold Coast International Hotel it won an architectural award.34

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For the official opening of the $65 million Gold Coast International Hotel in March 1987, nothing was omitted, nothing was too expensive and nothing was spared. From Japan came a planeload of developers, journalists, travel agents and writers. All were the personal guests of Shuji Yokoyama. They were amazed at the low property prices on the Gold Coast. The choice of people who came for the hotel launch ensured that word about the Gold Coast would get around in Japan. Daikyo Kanko Corporation quickly realised that the best way to benefit from this rush of Japanese interest would be to develop projects that would cater to all Japanese coming to the Gold Coast, whether they came for just a few days as tourists, whether they came for a longer golfing holiday, or whether they bought a home there for a permanent or itinerant stay. Many of those who came from Japan to the Gold Coast opening then went on to Palm Meadows to play golf. In this sense, Yokoyama acted as a catalyst for the Japanese presence on the Gold Coast. He provided his fellow Japanese with a very pleasant environment and a memorable golfing experience. This encouraged them to crystallise the idea of buying a Gold Coast property, or perhaps to hatch a development proposal.35 All the while, Daikyo Kanko Corporation drew up plans and commenced developing the Palm Meadows resort. Approximately 900 detached houses, courtyard houses and townhouses were to be built in seven separate clusters. The fairways of the 18 hole course and a series of elongated water features were to be the integrative elements of the estate. Apart from the residential component, Palm Meadows was also to have a 300 room hotel and a large sport complex with everything from tennis courts, a swimming pool to indoor aerobic spaces. When Daikyo Kanko Corporation realised that the noise from the Surfers Paradise International Raceway next door may have a harmful effect on the attractiveness of its Palm Meadows investment, it bought the racetrack for $8.9 million and gave the previous owner 18 days to vacate the site.36 Palm Meadows and the raceway site gave them a total of 341 hectares of land in Carrara, a very valuable asset in one of the major growth axes of the rapidly spreading Gold Coast. However, this was not all Daikyo Kanko Corporation had bought and was planning to develop. Next to its Gold Coast International Hotel in Surfers Paradise Daikyo had bought and cleared a large site on which it announced plans to build a $250 million, 48 storey urban resort. The drawings

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presented to the local media showed two tall, wafer-like buildings that were to be connected to the existing hotel. There was to be ‘everything’ in this resort — a hotel, serviced apartments, townhouses, a conference centre, boutique shops, numerous restaurants, a night-supper club, a ballroom, a fitness club, atrium spaces … the list seemed endless.37 It was very much a product of the 1980s boom, not to mention Japanese wealth and financial and psychological exuberance. The rationale for another such large project was that ‘people from overseas who come to the Gold Coast want to see if it is comparable to say the Hawai’ian islands, Orlando or even Cancun in Mexico’.38 Shuji Yokoyama really saw the Gold Coast as an international resort and part of the Pacific basin tourist circuit; the place had come a long way from the time when the local economy was based entirely on the holiday-makers from Melbourne and Sydney who went to the Gold Coast in search of winter sunshine and stayed in basic fibro motels or walk-up flats. As a postscript to the Daikyo Kanko Corporation story it should be mentioned that the company also owned two further development sites in the immediate vicinity of its Gold Coast International Hotel, two office buildings in adjacent Elkhorn Avenue, and a share in a golf course at Mudgeeraba; not to mention the 46.2 million shares that gave the company a 24.2 per cent stake in Jupiters Trust, the owner of Jupiters Casino in Broadbeach.39 However, the most intriguing company purchase was of a small shipyard, Lloyds, in Brisbane for $2.5 million. Within 18 months, Lloyds had completed the M.V. Fiesta-23, a large yacht for Mr Yokoyama. He said that he was looking forward to sailing in her with his family and friends.40 Apart from its Gold Coast property assets and development projects, Daikyo Kanko Corporation also had property investments in Brisbane and, especially, in Cairns.41 Various estimates were tossed around about the total value of these investments. The most accurate is that compiled by Judy Cho, a financial journalist whose reports appeared in the business pages of the Gold Coast Bulletin. In June 1992 she estimated the company’s assets in Queensland at $1.28 billion.42 A further $700 million was committed to the expansion of the company’s projects. This made Daikyo Kanko Corporation the largest Japanese property investor not just on the Gold Coast, but definitely in Queensland and also arguably, with EIE, in the whole of Australia.

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Tourists enjoying the Japanese bath house with a view of the golf links at the Palm Meadows Resort in Carrara. Source: Courtesy Fairfaxphotos

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On the Gold Coast, Daikyo Kanko Corporation made a point of going out into the community by sponsoring various activities. These ranged from the already mentioned Palm Meadows Cup for golf, chief sponsorship of the Gold Coast Indy Car Grand Prix, giving donations to the Surfers Paradise Life Saving Club, and establishing a baseball team — the Daikyo Dolphins, based on the Gold Coast. An endeavour of quite a different kind was the establishment in 1990 of the Yokoyama Scholarship Foundation. This gave an annual scholarship to an Australian national to study in Japan. Such initiatives showed the company’s desire to be seen as a good corporate citizen and were a sign that the company saw itself as being a part of the Gold Coast for the long haul. Shuji Yokoyama initiated and supervised all this activity from his newly built mansion in Southern Cross Drive on Cronin Island, an exclusive residential enclave on the Nerang River just west of Surfers Paradise. His $8 million waterfront mansion was built on three amalgamated building blocks, had eight bedrooms, a special private cinema room with 80 centimetre television sets that popped up electronically from the floor, a swimming pool, sauna, a 30 square wine cellar, and a palatial outdoor barbeque area. He used it not only as his own residence, but to entertain Japanese politicians and business people whom he had invited to the Gold Coast. They could eat, drink and relax beside the swimming pool while watching the lights of Surfers Paradise as a backdrop on the opposite shore of the Nerang River. The Yokoyama mansion was one of the highlights tour guides pointed out to visitors on cruise boats travelling up and down the river.

The ultimate example of hectic property acquisition If Daikyo Kanko Corporation was one of the first and largest Japanese companies on the Gold Coast, it certainly was not

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the only one, and definitely not the company with the most flamboyant image in the heady years of 1980s Japan. That distinction falls to Electronics and Industrial Enterprises, or, as it was always called, EIE. The meteoric rise of its president, Harunori Takahashi,, came to personify everything about the excesses of the bubble economy in Japan and its overseas repercussions. For Takahashi thought big, borrowed big, and spent even bigger. Looking back, the symbolism of Takahashi’s introduction to the idea of investing in Australia was fraught with delicious irony. It occurred at the Imperial Hotel in Tokyo in the northern summer of 1986. It is there that Takahashi was introduced to Alan Bond.43 Bond was at the peak of his business endeavours and the privileges and sybaritic lifestyle which the dramatic rise in his wealth and assets enabled him to enjoy.44 In Takahashi, Bond met an entrepreneurial soulmate. Both saw the economic boom conditions of the time, particularly the easy credit, as a golden opportunity to build global business empires in a matter of a few years. It was therefore not surprising that they quickly developed a rapport. Bond encouraged Takahashi to turn his gaze towards Australia and the property investment opportunities it offered. The other feature they had in common was that they were both outsiders as far as the world of the large established business companies of Japan and Australia were concerned. They soon went into partnership in property ventures in Hong Kong and after that on the Gold Coast.45 But who was Harunori Takahashi? As the 1980s boom progressed he became more and more the celebrity whose flamboyant business dealings held Australia spellbound. Harunori Takahashi once described himself as ‘just a simple boy from Kyushu island’, the southernmost of the four major islands that make up Japan.46 The geography may be accurate, but the implications were not. For, when Takahashi married in 1973, his wedding was attended by two former prime ministers, as well as the then Minister of Labour, and the ex-leader of Japan’s Upper House.47 Personal and family connections were crucial to his meteoric rise. His father-in-law was Yasushi Iwasawa, who controlled a substantial corporate empire that included the main TV station on Japan’s northernmost island of Hokkaido, as well as 52 other companies. Iwasawa bequeathed his son-in-law many of his political contacts. Earlier, attendance at Tokyo’s prestigious

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Keio University also gave Takahashi access to a network of business and political influence. As Peter Rimmer, in his study of EIE sets out, family and influential friends were crucial in Takahashi’s assumption of the presidency of the EIE Group in 1983 and the conversion of that company from being a small importer of electronic and computer components to a major hotel, resort, transport and financial services conglomerate spanning the western Pacific, Southeast Asia, and even the United States and Western Europe. All of this was achieved in not much more than half a decade. This was an astounding achievement, even by the standards of Japan’s heady 1980s boom. An advantageous marriage greatly helped cement Takahashi’s political connections, but it was Morihasa Ishida, a cousin of his father, who was crucial in enabling him to tap into the seemingly unending flows of credit that made Japan seem like the financial colossus of the 1980s. Ishida was the managing director of the Japan Long-Term Credit Bank and he was instrumental in arranging the first big loans to Takahashi and quickly became his biggest financier.48 The acquisition of a portfolio of 15 commercial properties in Tokyo served EIE very well. Spiralling property prices made such assets the ideal collateral for the banks lending him the investment capital. At the time, EIE executives argued that there was little risk in the company having a high level of borrowings because the property assets they were buying were top quality and their interest repayments were kept at manageable levels by the low and fixed rates at which EIE was able to borrow from the Japanese banks. Furthermore, Takahashi also tapped into that other seemingly inexhaustible flow of capital in Japan at the time: golf club memberships. Receipts from the sale of memberships provided EIE with a quick source of funds, which then enabled it to develop the golf club or resort for which the memberships had already been sold. This resort then became the collateral for the purchase of the site for the next such project. Between 1987 and 1990, EIE amassed a portfolio of eight golf clubs/resorts in Japan.49 These became the springboard for its acquisitions overseas. So buy it did, everywhere around the Pacific basin and beyond. The international spending spree launched by EIE in 1986 was, however, also affected by another personal relationship, that between Takahashi and a man who was given the title of ‘Senior

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Investment Consultant’ to the EIE International Corporation. His name was Dr Robert Bungo Ishizaki. Australians who dealt with him just called him ‘Bungo’. If Takahashi had good business connections in Japan, then Bungo Ishizaki had the self-confidence to act as front man and negotiate deals for him overseas. He was an extrovert, urbane Americaneducated economist who spoke fluent English and took great delight in peppering his comments with local colloquialisms. At one press conference in Sydney he donned an Akubra hat and beamed at the photographers as they took his picture. In a 1989 interview, Ishizaki shed some light on his relationship with Takahashi, the more taciturn of the two: ‘We are each other’s alter ego, I whack and beat the bush and he catches the bird,’50 he said. One Gold Coast property manager referred to Ishizaki as ‘the original wheeler-dealer’ who, of course, gained a hefty fee for each property deal he successfully negotiated. There were instances where the vendor baulked at the six-figure fee demanded by Ishizaki, so the sale fell through.51 Takahashi, Ishizaki, and their entourage flew from country to country in their Boeing 727 jet looking at properties to buy. Journalists who followed their dealings were amazed at sums Takahashi was spending and the quick and apparently impulsive way he made deals. Adam Shand, an Australian financial journalist, was invited to fly with the EIE entourage on one such trip through the South Pacific in 1989. His comments give the flavour of the Takahashi buying spree: He [Takahashi] and Bungo were looking at a piece of beachfront near one of their hotels [in Tahiti]. They walked up and down the beach a couple of times and Takahashi said: ‘Yeah, we’ll have that’. And that was it. That was very much their style — bang, bang, buy it. Though this story had an important rider: the minder from the Long-Term Credit Bank was there with them on the beach. The banks were prepared to go all the way with Takahashi.52 The last point is the crucial one, for, as one analyst of the Japanese bubble economy summed it up, ‘Takahashi’s empire was based solely on his ability to persuade the banks to keep lending’.53 The result was EIE’s ‘flamboyant and virtually unbridled forays into national and international real estate’.54 However, the more comprehensive study of EIE’s modus operandi by Peter Rimmer shows that there was a rationale behind the frenetic commercial

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activity. This was the desire to build up a vertically integrated network of hotels, resorts, golf courses and condominiums based on Japan and encompassing much of the Pacific basin. Takahashi admitted as much in a rare interview he gave in 1988. On that occasion he said: My ambition is to have an international operation of resorts and hotels, with bases in strategic locations throughout the world, but concentrating on the Pacific … Another plan is to have a type of businessmen’s club under which corporate members will be able to use my resorts in a number of countries, perhaps staying at several during one holiday or work trip.55 In 1992, by the end of the boom, Rimmer estimated that Takahashi had amassed assets to the value of $US7 billion ($A12 billion), and a debt of about 75 per cent of that figure56 They had bought or were developing properties in Hawai’i, Fiji, New Caledonia, Tahiti, Guam and Saipan, not to mention Hong Kong, Bangkok, New York, Milan and London. Australia was very much part of Takahashi’s Pacific basin scheme. Alan Bond had made him aware of the opportunities to be had there. Takahashi and his entourage first arrived in Sydney on 10 April 1986. Within days he had decided to invest money in Australia. His first purchase was a block of waterfront land on the Gold Coast. He was also eyeing the Hyatt Hotel in Kings Cross for possible purchase. Alan Bond, however, advised him to ‘only go for the best’, and that was the recently completed Regent Hotel overlooking Circular Quay. So that is what Takahashi bought for $145 million. ‘Going for the best’ was soon to be his maxim on the Gold Coast as well, and that meant Sanctuary Cove. If EIE was the creation of the Japanese bubble economy, then Sanctuary Cove was a symbol of the extravagance of the Gold Coast property boom of the 1980s. In that sense, they were made for each other. The project was the brainchild of Mike Gore, a Sydney used car salesman who arrived on the Gold Coast in 1972 with $400 in his pocket.57 After various car selling and truck repair ventures, Gore went into partnership with Hong Kong based Cheoy Lee to establish a boat building and repair business on the Gold Coast. They hit on a site near the mouth of the Coomera River at the northern end of the Broadwater. However, soon Mike Gore’s vision grew from just boats to the development of a residential resort the like of which, he argued, the Gold Coast had not seen before. He formed Discovery Bay Developments and in

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October 1984, together with Cheoy Lee, bought 474 hectares on the south side of the mouth of the Coomera River, a location beyond the northern perimeter of the Gold Coast urban area. The site had really very little in its favour. The Gold Coast attracted people because of its sun, surf, shops and entertainment. This area had nothing; no access, no sandy beach, no obvious building land. It was just a coastal swamp. Queensland University had used it for scientific fieldwork. As Felicity Wishart, a researcher at the time, remarked, ‘in the mid-80s it was a perfect place for mosquito research, being mostly low-lying swamp.’58 Mike Gore was not deterred. He went to North America and visited the latest residential resort projects and was particularly taken by the image of exclusivity that the newly built gated communities were able to create. However, replicating this idea in Australia was not immediately possible. There were legal barriers to be overcome. Furthermore, closing off public streets for the sake of rich residents touched the nerve of Australian egalitarianism, a belief to be tampered with at one’s own political risk. But Mike Gore had already developed good lines of communication to the government of Sir Joh Bjelke-Petersen in Brisbane and so was able to get a special act of the Queensland

Harunori Takahashi at Sanctuary Cove. Source: Courtesy Courier-Mail

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Parliament passed which established the unique legal basis of the Sanctuary Cove resort.59 The Sanctuary Cove Resort Act (1985) in effect excised the property from local government jurisdiction. Sanctuary Cove became a private domain with street cleaning, garbage collection and even mail delivery to individual houses being carried out by its own management.60 The Act also limited in perpetuity the number of houses allowed at the resort; that is, no overshadowing of existing houses by double storey structures, or subsequent permission for development at a higher density than what was there when the initial purchaser had bought the property. Architectural and landscaping features had to remain in harmony and the Act allowed some streets to be closed off to all uninvited people, except the police. In this way, the company could oversee any renovations a property owner may wish to undertake, exclude unwanted persons and so ‘protect everyone’s investment’.61 It became a gated community. Mike Gore, never one to let verbal niceties get in the way of a graphic quotable quote, publicised the exclusivity of Sanctuary Cove in the following way: What do you do when the cockroaches invade your kitchen? You get them out! [They’re] abhorrent, disruptive — you don’t want them around you!62 The meaning was clear: this project was promoted as the ultimate in exclusivity because it was a means of escaping the ‘human cockroaches’ outside. Large foldout glossy fliers were used to advertise Sanctuary Cove, with headings such as, ‘If this was a Civilised World, you wouldn’t need Sanctuary Cove’ and ‘[Sanctuary Cove] An island of privilege in a sea of mediocrity’. At the same time, it is fair to say that the late 1980s was a period when — especially in Sydney — there was increasing fear of being burgled. So, the idea of a gated community would have had appeal not just because of its social cachet, but because of the guarantees of security it promised. This site of largely swamp land, with one or two hillocks on which were a couple of ramshackle farm buildings, was to be converted into the most exclusive resort development that Australia had seen. What was this resort to consist of? Its core commercial asset was to be two thousand residences ranging from two-bedroom apartments to 700–750 square metre mansions. All residences were to have either a golf links or a waterfront view, with some to be built on top of the rises which the bulldozers had piled

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up. A 307 berth marina and yacht club were to be the focal point for a Marina Shopping Village of specialty shops, restaurants and even a boutique brewery. There was also a fitness centre with 17 tennis courts, gymnasium, squash courts and, needless to say, two 18 hole golf courses. Gore also wanted a resort hotel for visitors. On a low rise overlooking the Coomera River rose the 247 room Sanctuary Cove Hyatt Regency Hotel designed to resemble an Australian Colonial mansion behind its artificially created lagoon. Around it were clusters of Colonial-style guest rooms. Gore was determined and progress was rapid. By the end of December 1987, most of the communal facilities had been completed, as well as 350 of the residences. Gore was a clever self-promoter; in the months leading up to the official opening of Sanctuary Cove hardly a day went by without him being in the media spotlight. Sanctuary Cove, he kept repeating, was ‘the Ultimate Resort’, and, in January 1988, it was to have the ‘Ultimate Opening’. The actual event lasted five days between 6 and 10 January 1988. Parties, fireworks and golf and tennis tournaments jostled for audience attention. Names such as Clive James, Arnold Palmer, Ivan Lendl and Boris Becker were on the guest list, and the whole ‘Ultimate Event’ culminated in the ‘Ultimate Concert’ given by Whitney Houston and Frank Sinatra. With such a cast, national television coverage was assured. The cost of all this to Mike Gore was estimated at $15 million.63 No wonder Harunori Takahashi’s gaze was soon riveted on Sanctuary Cove. He had already tried to purchase it during its construction phase and he kept referring to it as ‘the ultimate piece of real estate’ in Australia.64 The sale negotiations of Sanctuary Cove were held in Sydney and they gained national media coverage. The EIE bid was based on a valuation of $252 million made by the international firm of property consultants Jones Lang Wootton. But another Japanese bidder appeared. This was the liquor and restaurant giant Suntory. Both EIE and Suntory approached the negotiations with great determination and the ‘rustle’ of an open cheque book. Their wealth of capital and their superconfidence defined the negotiations. As one Australian real estate consultant described it: ‘They just couldn’t help themselves. They showed their enthusiasm too much. [The EIE people] just came to me and said: “Please help us buy Sanctuary Cove”.’65 Any Australian bidders withdrew well below the 300 million dollar mark, but Suntory and EIE pushed on.

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Finally, Suntory stopped at $340 million, then EIE made an offer of $341 million, and so, on the 23rd of September 1988, Takahashi became the owner of Sanctuary Cove.66 This was the largest single property transaction in Australian history. He immediately announced plans to inject large sums of capital into the resort. The golf courses were to be modified to suit Japanese taste, further exclusive shops were to be attracted to the Marina Village and the building of further houses was to be accelerated. This would enable the whole project to be completed by 1996. In the next two years, 174 further houses in two clusters called ‘Bayhill Terraces’ and ‘Palm Lake’ were completed. They were designed by Japanese architects to appeal to the stream of buyers from there that EIE’s marketing was trying to attract. They had a larger number of smaller rooms with smaller windows, in contrast with the Australian taste for open planning. However, if the potential of the Japanese market were realised, then they would become money-spinners for EIE.67 In the meantime, Takahashi took great pride in his newest acquisition and was frequently seen on holidays with his family at Sanctuary Cove and playing golf on one of its courses; all the while his Boeing 727 was parked on the runway at Coolangatta Airport. He was also spotted at Jupiters Casino in the company of numerous bankers, politicians and bureaucrats from Japan. He made a habit of inviting his influential friends and backers to the Gold Coast, flying them down for weekends of dining, wining and gambling at the blackjack tables at Jupiters. One of those spotted in the casino at the time was Ichiro Ozawa, very much a Tokyo political power broker of the period; also seen there was the head of the Tokyo tax office and the president of the Long-Term Credit Bank.68 Sanctuary Cove was the prestige asset with which Takahashi could impress, but it wasn’t his only investment on the Gold Coast. When Takahashi met Alan Bond in Japan they developed a broad-based business relationship whose perhaps most interesting aspect was that EIE bought a 50 per cent interest in Bond University, which was then under construction at Robina on the Gold Coast. This $250 million project was quite a speculative venture for both of them. At the time private universities were an unproven investment in Australia. Selling education as a product was a new idea and whether Australian and overseas students would pay to come to study on the Gold Coast remained to be seen.

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However, around the cluster of university buildings under construction was a 400 hectare tract of land for a possible industrial park and housing estate. This no doubt helped to make the investment more attractive to the EIE President. After spending $186 million, Bond University enrolled its first students. Classes commenced in May 1989 with 322 students, including 31 from overseas. The legal basis of the venture required clarification. Bond University was established by an Act of the Queensland Parliament as an independent educational institution and the joint venture partners owned the land and the buildings. By 1990, the manipulative nature of Alan Bond’s financial dealings was becoming patently obvious and the financial and legal noose was tightening around his neck. As well as that, the oncoming recession led to the unravelling of his business empire. Huge debts had piled up and assets had to be sold as fast as possible. So EIE took over the payment of all the financial subsidies needed to cover the running costs of Bond University, this meant that in effect, Alan Bond withdrew his support of the venture. In January 1992, EIE bought the Bond Corporation’s 50 per cent share for a figure said to have been considerably less than the $55 million Alan Bond had been seeking.69 Bond had crashed, but Takahashi still appeared to be riding high and was now the sole owner of the physical assets of a university in a foreign country. This was no doubt one of the most surprising developments in a global business career that had spanned not much more than half a decade and had dazzled all who followed it in Japan and around the Pacific. If Takahashi, Yokoyama and Nakandakari were the most public figures of the Japanese investor invasion of the late 1980s, they were certainly not the only ones. Many private individuals, members of small family companies and even large companies whose business had previously had no connection to property, put their money into Gold Coast real estate. Therefore, it is important to gain an overview of this and so place the more flamboyant commercial stars into a broader perspective.

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Footnotes 1

2

3 4

5

6 7 8

9 10 11 12

13

14

15

16

The opening of the stabilised entrance to the Broadwater from the Pacific Ocean on 31 May 1986 enabled ocean-going yachts to move in and out in safety. This increased the attractiveness of the Broadwater both for recreational purposes as well as potential residents. This saw the building of prestigious housing estates with canal or Broadwater frontages at Runaway Bay, Paradise Point and Hollywell; the last named also featured a large marina. Courier-Mail, 31 August 1990. Jim Raptis had already established this distinctive style through his earlier high-rise apartment/shopping centre projects: ‘Mykonos’ (1974); ‘Saint Tropez’ (1979); ‘Monte Carlo’ (1981); ‘Acapulco’ (1982); ‘Biarritz’ (1982); ‘Aegean’ (1983); ‘Le Boulevard’ (1986). K. K. Alpha Corporation had a 1,000 hectare ski-golf resort at Tomamu in northern Honshu; also, they developed an onzen or spa resort at Nishi Izu (Honshu) and a 2,600 hectare golf resort on Molokai in Hawai’i. Personal communication, 13 April 1994. The Australian, 8 September 1990. Dan McVay, Joint Managing Director, Richard Ellis, International Property Consultants. Personal communication, 21 October 1994. Peter Lacey, 13 April 1990. Gold Coast Bulletin, 16 June 1988. Peter Lacey, 13 April 1994. For example, see K. Kubota, ‘Japanese Politics: A Reflection of Social Familism’, in J. Kovalo (ed.), Japan in Focus, Captus University Publications, York University, North York, 1994, pp. 36–57; also, Robert J. Smith, Japanese Society: Tradition, Self, and the Social Order, Cambridge University Press, Cambridge, 1983; Chie Nakane, Japanese Society, Charles E. Tuttle Co., Tokyo, 1984. Bill Morris, Director, Prodap Services Pty Ltd, personal communication, 11 April 1994; also, Zin Sawachika, Japan Management Corporation, commented, ‘No market research was done by most Japanese companies investing on the Gold Coast. They were motivated by a desire to gain or develop a more prestigious asset than their rivals’, Personal communication, 19 October 1994. Geoff Burchill, Burchill Bate Parker & Partners. Personal communication, 25 October 1994. One local news magazine included ‘Chiz’ Nakandakari in its list of the ‘five high-flying women for whom Surfers is paradise’, New Weekly, 15 May 1995. Gold Coast Weekend Herald, 13 January 1994.

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18 19

20

21

22

23

24 25

26

27 28 29

30

31

32

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Personal communication, 10 April 1994. The irony of this was that Maruko had made its fortune in Japan through developing a type of apartment project known as ‘one-room mansion apartments’. Full page advertisement in the Gold Coast Bulletin, 1 February 1992. The advertising brochure had a cover that showed a grey-green marble surface into which were engraved the words ‘Rivage Royale’. K. Shinohara, ‘Auf dem Weg zur Architektur,’ Baumeister, vol. 12, 1984, pp. 47–51. Ron Burling, Director, Burling, Brown and Partners Pty Ltd Architects. Personal communication, 30 June 1995. Chizuko Nakandakari commented that this Californian style did not always appeal to the affluent older Australian buyer. They associated conservative luxury with ‘English styles’. According to Ron Burling this ‘S’ shape also maximised the views from the apartments, hence it combined the iconic with the practical marketing advantages. The estimated cost of this water and landscaping was $5 million. The marketing of Rivage Royale began in 1990 and all apartments were to be sold within two years. However, the economic recession in Japan and Australia in the early 1990s, as well as the over-estimation of the size of the market on the Gold Coast for such luxury apartments, forced Maruko Corporation to extend this to 1997. Nevertheless while many other high-rise developers were forced to discount prices to speed sales, the Rivage Royale did not. In translation from Meatpie, Japanese Tourist Magazine, Sydney, Autumn–Winter 1992, p. 2. This was subsequently increased to $800,000. The Spirit of Sanctuary Cove, Spring 1989, p. 12. The first major overseas investor on the Gold Coast was the Singaporean Robin Loh. In 1980 he bought a 298 hectare site 12 kilometres southwest of Surfers Paradise. Since then this has been developed as a community of 30,000 people. For the last 20 years it has been the most important growth corridor of the Gold Coast urban area. In 1986 Daikyo Kanko Corporation built 10,657 apartments, of these more than half were in the Tokyo area. The company had 12 per cent of the national apartment market. The second largest supplier of apartments was Recruit Cosmos with a market share of 4.9 per cent (Daikyo Kanko Corporation, Fact Book, Tokyo, 1986, p. 5). Ivor Ries, ‘Tokyo’s property lion puts its faith in Australia,’ Business Review Weekly, vol. 9, no. 24, 19 June, 1987, p. 52. Tatsuo Akachi, Director, Daikyo Kanko Ltd, ‘Daikyo Kanko — Our Approach’, The Valuer, vol. 29, no. 6, April 1987, pp. 460–62.

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33

The Conrad International Hotel and Jupiters Casino complex gave the Gold Coast its first five-star hotel. It was opened in November 1985. Desmond Brooks, Managing Director, DBI Design Corporation. Personal communication, 28 June 1995. Alan Midwood, General Manager, Rider Hunt, Property Valuers, claimed that the decision of Daikyo Kanko, and especially the enthusiasm of its president, to make large investments on the Gold Coast was pivotal in encouraging other Japanese companies and individuals to invest there. Personal communication, 14 April 1994. The Australian, 12–13 September 1987. Gold Coast Bulletin, 15 June 1989. Arthur Blair, General Manager, Daikyo Development, Gold Coast Bulletin, 15 June 1989. At the time of purchase their value was estimated at $100 million; in mid-1992, after the boom had passed, it had decreased to $46 million. Daikyo News, Winter Edition 1992, p. 5. In Cairns, Daikyo Kanko Corporation owned one hotel and was part owner of two others; it also owned two golf course resorts that it was developing, had a lease over the Green Island resort, and owned a reef cruise company, a city building with a coach depot and retail complex, and a 241 hectare residential development site on the edge of the urban area. Gold Coast Bulletin, 26 June 1992. Ivor Ries, ‘Bond supported by Japanese investor’, Business Review Weekly, 10 July 1987, pp. 61–2. One reason for his visit to Japan at that time was to attend the launching of his $25 million yacht Southern Cross 3. Takahashi bought a 50 per cent interest in the Bond Corporation’s $HK1.9 billion Bond Centre office development in Hong Kong. Peter Hartcher, Australian Financial Review, 12 July 1993. Peter J. Rimmer, ‘Japan’s “Bubble Economy” and the Pacific: The Case of the EIE Group’, Pacific Viewpoint, vol. 34, no. 1, 1993, pp. 25–43. Peter Hartcher, ‘The Face of Japan’s New Money,’ The Age, Good Weekend, 9 December 1989, pp. 105–7. Though the Japan Long-Term Credit Bank was EIE’s most important source of funds, other established banks such as the Mitsui Trust & Banking Corporation and the Sumitomo Bank also provided credit. Peter J. Rimmer, ‘Japanese Investment in Golf Course Development: Australia–Japan Links’, International Journal of Urban and Regional Research, vol. 18, no. 2, 1994, pp. 234–55. The Weekend Australian, 17–18 July 1993. David Parsons (General Manager, Lustig & Moar Pty Ltd), claimed that the purchasing spree in which EIE indulged in 1987–88 was encouraged by the fact that Bungo Ishizaki was able to collect a ‘fee’

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36 37 38

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40 41

42 43

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46 47

48

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54 55 56

57 58 59

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63 64 65

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68 69

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from the vendor on completion of each deal. Such fees could amount to $500,000. A few vendors refused to pay. (Personal communication, 4 November 1993.) In November 1989 Ishizaki also announced his intention to invest in property development on the Gold Coast in partnership with local building company McMaster Constructions. Quoted in The Weekend Australian, 17–18 July 1993. Christopher Wood, The Bubble Economy: The Japanese economic collapse, Sidgwick & Jackson, London, 1992, p. 58. Courier-Mail, 16 July 1993. The Australian, 27 September 1988. In September 1988 Peter Wilson, the Tokyo corespondent of The Australian, estimated the value of EIE’s assets at $A7 billion, five years later in 1993, Florence Chong, the property writer of the same newspaper, put the figure at $A15 billion (The Australian, 27 September 1988 and 3 July 1993). ‘Mike is a cove who won’t lie down’, Gold Coast Bulletin, 8 April 1987. The Australian, 18 July 2001. Mike Gore was one of the group of business people given the name of the ‘White Shoe Brigade’ who backed the ‘Joh for Canberra’ campaign in the 1987 federal election. The cost of this was a body corporate fee of between $120 and $200 per week. Eliza Macrossan, Property Manager, Discovery Bay Developments. Personal communication, 18 October 1994. David Huffer, Managing Director, Discovery Bay Developments, Jabiru: The Spirit of Sanctuary Cove, vol. 1. no. 1, 1990, p. 7. Quoted in ‘Heir to the white shoes,’ Good Weekend, November 16, 2002, p. 30. The Australian, 18 July 1992. Gold Coast Mail, 28 September 1988. Dan McVay, Joint Managing Director, Richard Ellis International Property Consultants. Personal communication, 21 October 1994. The vendor in fact was not Mike Gore but Ariadne Australia. Gore had already exhausted his own and his wife Jenny’s financial resources, and Cheoy Lee had parted company with him in 1986. So soon after its official opening Gore sold Sanctuary Cove to Ariadne Australia. After 1990 the number of Japanese buyers fell and their design made them more difficult to sell to Australians. So the Ultimate Auction was organised on the 30 August 1992 where these houses were knocked down at bargain prices. Eliza Macrossan, Property Manager, Discovery Bay Developments. Personal communication, 18 October 1994. Ben Hills, Tokyo correspondent, The Age, 3 April 1995. The Age, 25 January 1992.

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Chapter 4

Japanese investors: from company executives to pop stars

MASAO SEN WAS one of Japan’s favourite folk singers. Since the beginning of his career in 1965, he had released 37 single records, with two of them selling over a million copies.1 He had literally millions of fans and the dark-haired, smooth crooner was very popular in the exclusive nightclubs of Tokyo, Osaka and Kobe. His suave manner, dark good looks and sentimental style of singing made him a drawcard for these expensive establishments which were frequented by the nouveau riche of Japan’s 1980s boom economy. However, in the second half of the 1980s, Masao Sen’s singing voice seemed to be heard less and less as he decided to rest his tonsils more and more. The reason for this said a lot about the speculative frenzy that gripped Japan in the late 1980s. People whose careers had no connection with real estate wanted to get into the property scene. Masao Sen was one such person. He was seduced by the flow of easy credit and increasingly devoted his attention to building up an investment property empire, both in Japan and overseas. Buying property in Australia was one of his first forays outside Japan.2 He was not the only Japanese pop star to be swept up by the property buying frenzy of the time.

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Eikichi Yazawa was caught up even more, and a good part of his money was invested on the Gold Coast. Yazawa had been billed as ‘Japan’s answer to Mick Jagger’, and, as a commentator of the time quipped, ‘when he’s not rocking and rolling, Mr Yazawa, it seems, is shaking and moving in business and property circles’.3 In 1987, he established a company called the Comestock Corporation to manage revenues from his concerts, recording and song-writing royalties and merchandising. In the next three years this company bought an estimated $20 million worth of properties in Australia, most of them on the Gold Coast. They included a development site in central Surfers Paradise, three small adjacent properties in the commercial zone at Bundall and land for the development of a small luxurious canal estate next to the Surfers Paradise golf course in Merrimac.4 Yazawa’s Australian property investments were to be managed by another person well-known in Japan, the professional tennis player, Hiromu (‘Henry’) Kawada. Yazawa and he were friends, and Henry Kawada became the public face of the pop star’s Gold Coast projects. It was Kawada who was interviewed about the progress of the Rhode Island canal estate development, it was he who spelt out details of its quality and exclusiveness and, when later in the early 90s the Gold Coast property market took a steep dive, it was he

The Rialto Bridge of Venice as the logo of the Hope Island Resort. Source: J. Hajdu

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who had to take the decision to speed sales by discounting the prices of the unsold condominiums. Eikichi Yazawa’s focus was much more on the Bundall development site that had been assembled for him. For this site he had a dream that he wished to realise: the building of a 24 storey tower to be known as the Bundall Centre. Inside it were to be a large music studio, television studio, an English language school and tuition facilities for business and tourism management, not to mention a driving and pilot school for Japanese youth. Henry Kawada said that ‘Mr Yazawa wants to set up these facilities for any young Japanese nationals who are interested in challenging their future in Australia’.5 An ambitious dream to say the least. The vision of the Australian Gold Coast as a place of freedom and selffulfillment for the Japanese seemed to be a recurring motif with more than a few of the investment decisions they made.

An overview of Japanese investors It is important to put the presence of investment capital of such Japanese pop stars and tennis players in perspective. This can be done by giving an overview of how many Japanese came and who they were; in other words, a kind of statistical summary of the Japanese investors who arrived on the Gold Coast. All property transactions in Queensland have to be registered with the Department of Lands in Brisbane. Although such registration may occur with a delay of up to six or eight weeks from the date on which the property transaction was actually settled, these statistics do provide a measure of the scale of the Japanese investment at the time. The years between 1986 and 1990 were the peak of this Japanese investment boom and during that time 629 registered property transactions on the Gold Coast involved a Japanese national. A large majority of these were properties bought by private people for their own use, or for letting purposes. Such people had either decided to settle on the Gold Coast or, more commonly, wanted a second home there which they planned to use for holidays or for their eventual retirement. Other Japanese who bought an apartment or house were involved with a business on the Gold Coast or Brisbane and so saw themselves living there for the foreseeable future. The Japanese tourism boom encouraged this type of Japanese property buyer. The rapid rise in the number of Japanese tourists

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visiting southeast Queensland led to the appearance of shops, restaurants, bus lines, travel offices and such that specialised in catering to their needs and some of these were owned or managed by Japanese. The presence of a Japanese speaker was seen as a great asset in the success of the business. As these Japanese usually liked the Gold Coast lifestyle, some of them sought to increase their sense of permanent residence by buying property there. In the eyes of all Japanese, houses and apartments were so cheap on the Gold Coast that any purchase was seen as a coup. However, as the cases of Eikichi Yazawa and especially Shuji Yokoyama and Harunori Takahashi have shown, there were other Japanese investors who brought very large sums of money to invest, and were in many cases the bosses of large companies. The impact on the Gold Coast of such an investment was obviously going to be much larger than when a retired couple from Yokohama bought a fourth floor apartment in a high-rise block at Broadbeach or Southport. It was these large investments, usually not by an individual but by a Japanese company, that attracted local media attention and resulted in the awe or disquiet among Gold Coast residents. Therefore, they should be considered separately. The use of a comprehensive range of sources6 has produced a list of 90 such transactions on the Gold Coast involving a Japanese national. These can be categorised according to the main business of the investor in Japan. What results is as follows:7 Housing, resort development company

10

Industrial or trading company

11

Building, civil engineering, property company

20

Travel, transport or tourism company

11

Finance/banking, insurance company

4

Private company of an individual or family

24

Other

10

TOTAL

90

The ten classified as ‘Housing, resort development company’ were firms that had been active in this field in Japan for a considerable period of time. As mentioned earlier, Daikyo Kanko Corporation was a well-established home builder, as were four other housing companies who entered the Gold Coast property market: Sanwa Home, Dia Kensetsu, Anabuki Construction and Daiwa House. The last named built the 93 unit, 34 storey luxurious apartment block

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‘The Inlet’ at Main Beach. Others in this category had been encouraged to enter the field of housing and resort development in Japan by the prospect of the easy credit and amenable planning regulations they were able to obtain through the Overall Resort Area Adjustment Law of 1987. It appears that the Co-You Corporation, established by a private Osaka developer, was of the latter type. However, of this type of investor, the Shinko Corporation was one of the most important. An interesting comparison can be made between Shinko Corporation and the established hotel chain and housing construction company, Nara Holdings, in the way they approached their investment decisions on the Gold Coast.

Kaleidoscopic panorama of Gold Course resorts On arrival at the Gold Coast, many Japanese investors had a rigid, preconceived notion of the project they wanted to undertake there. Their notions of what their development should look like were often based on the familiarity they had with overseas tourist or architectural journals, or with their first-hand experience as visitors or investors in Hawai’i and southern California.8 The advice of local consultants was often ignored, and tended to be used only to facilitate the getting of permits. If economic feasibility studies were prepared, they were just as likely to be ignored by the Japanese company.9 The initial decisions about the nature of the Hope Island golf course resort at the northern end of the Gold Coast show this clearly. The Shinko Corporation was very much a company that shot up during the 1980s boom in Japan. Its founder and chairman, Shigeru Isutani from Osaka, saw the profit-making possibilities of the resort development initiatives that were being encouraged by the government in Tokyo. He started building golf courses and, by the late 80s, had nine of them in Japan. The demand was so great that he was able to sell golf club memberships at up to $15,000 each. These memberships were fixed in number, and, in the heady days of the boom, their value escalated and they were traded like shares on the stock exchange. At the same time, a round of golf for the casual player would cost between $150 and $450.10 Isutani appeared to have tapped an inexhaustible source of profits and this encouraged him to expand overseas. First to Hawai’i, where he built a couple of golf courses each with its own corporate lodges. In 1987, he sent his representatives to the Gold Coast to look at investment opportunities. Only the best would do, so naturally his eyes fell on

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Sanctuary Cove. Having missed out on that, Isutani wanted to equal it, and he settled on the Hope Island site just to its south. The degraded dairy farm and swampland area had already been assembled as a development site by a local consortium involving prominent developer Eddie Kornhauser; Geoff Burchill, consulting engineer and planner; and National Party politician and local land owner, Russ Hinze. The proposal was for a conventional residential canal estate, with a maximum number of saleable building blocks with canal frontages. These three local identities were experienced in the Gold Coast property market and knew which type of project would provide the best flow of cash returns. There was to be a three-star hotel and a 9 hole golf course, but at a peripheral location on the estate. At this point the property was placed on the market and the Shinko Corporation purchased it.11 Shinko Corporation retained Burchill Bate Parker and Partners to do a feasibility study and prepare detailed design plans, but it did not like the outcomes; instead, Shinko Corporation wanted to go upmarket. So Geoff Burchill and Shinko Corporation parted ways. Shinko Corporation wanted a luxurious golf clubhouse and fivestar hotel to be the focal point of the whole development. Also, there was to be a fully integrated deep canal system with concrete and crushed rock vertical walls rather than the simpler, diagonally

The clubhouse of the Hope Island golf club Source: Shinko Australia Pty Ltd

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sloping rock edges seen in the original proposal. This would make the canals fully navigable and linked to the Coomera River and Broadwater. A system of locks would control the flow of water into the central lake system next to the planned 18 hole golf course. As a first step in the development Shinko Corporation spent $175 million on the dredging of these canals, building the embankments, development of the hydraulic system and establishing the golf course. The symbol chosen as the logo of the Hope Island project was the Rialto Bridge of Venice. Reference was made to this motif in the sloping bridges with embossed railings that straddled the canals around the hotel and clubhouse in the centre of the development. The luxury desired by Isutani was best seen in the golf clubhouse that he had built. As one approached the clubhouse, a formal paved piazza with palm trees and a Moorish style fountain led to a number of wide steps which took one up to the round central section of the building and main entrance. A pediment fringed the edges of the orange guttertiled roof of the building and extended over the full extent of its wings on either side of the entrance. The neo-classical and Spanish elements of its architecture spoke of southern California. The interior of the clubhouse had in its centre a large, circular carpeted space with a spectacular flower arrangement on a table in the middle. Around the sides of this space were a pair of semi-circular colonnaded cloisters behind which were recessed the various public amenities, such as restaurants, bars, meeting areas, and the golf shop. The aura of luxury even extended to the changing rooms and toilets. In the men’s toilet, marble partitions separated the individual urinals, brass taps shone on the walls of both the Western and Japanese style bathrooms and oak-panelled lockers lined the walls of the changing rooms. A member of the golf club could have a personal locker with his name embossed on the door. The Shinko Corporation spent approximately $13 million on the clubhouse. The golf course itself considered not just functionality but also landscape aesthetics. The bunkers were designed to look as if they had been shaped by wind and rain, and the undulating fairways wound through wetlands to elevated swale-surrounded greens. The course had its own hydraulic system that enabled it to use recycled water. But the ultimate technological indulgence was a special wave-making mechanism installed into the lake. The purpose of

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this was to blow a golf ball that had been shot into the water to the edge of the lake from where it could be retrieved easily. The final cost of the golf course was $36 million. The advertisements in the Japanese-language press wrote of Hope Island as ‘the Dream Resort that has everything’.12 All this building activity was overseen by Isutani from a 635 square metre (70 square) penthouse which he bought in the ‘Contessa’ high-rise at Main Beach. He resided there for a few days every six to eight weeks, often accompanied by business colleagues from Japan to whom he could spell out his dreams for Hope Island.13 However, the cash flow to the company, and the rate of development of the resort, was not to be as easy as Shinko Corporation had assumed it would be. Shigeru Isutani and his business partners in Shinko Corporation were determined to develop a project on the Gold Coast according to their preconceived ideas. But Tadanori Nara of Nara Holdings was happy to take local advice. The Sea World theme park on the Spit at Main Beach on the Gold Coast was one of the great entrepreneurial success stories of the 1980s. Peter Lawrence had bought it in 1984 and he quickly saw that a hotel integrated with it would give Sea World a more assured flow of visitors. This was also a way of tapping into the growing Japanese tourist market. It was in the couple of years that followed that Nara Holdings started to invest in tourist/leisure projects overseas.14 Tadanori Nara saw the Gold Coast as one of the Pacific basin’s premier tourist resorts and so concluded that a five-star hotel/resort was what he wanted his company to build there. But, when Peter Lawrence met Tadanori Nara in Japan, he persuaded Nara to go into partnership with him in a hotel project that would cater to Japanese honeymooners and the Australian family market. In other words, a more modest proposition having an obviously identifiable clientele. The hotel would be built at the three to four star level and be on land next to Sea World. In this way, one enterprise fed off the other and both would gain an increased patronage. A low-slung, three-storey, 402 room complex of buildings zigzagging around a landscaped swimming pool area was completed on a site to the immediate north of Sea World. The brochures advertising the hotel in both English and Japanese were headed

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‘Stay at the Sea World Nara Resort’. You were encouraged to buy the package of accommodation and entertainment at the theme park. The project was an immediate financial success. John Wild, the Commercial Manager of Nara Australia, put down the speed with which their hotel reached profitability to three factors: cheap building land; construction of a functional, middle-level cost resort/hotel complex; integration with the theme park.15 The value of knowing the Gold Coast property market and its cycles — in other words, being realistic about the Gold Coast’s property potential — also helped the second Nara Holdings development, the Paradise Springs golf course resort. Nara Holdings bought the land at Robina in January 1989 and Tadanori Nara wanted to start on the development straightaway. However, by 1989, the signs of downturn in the Gold Coast property market were becoming unmistakable, and he was advised to proceed slowly. This also had the advantage of getting builders at cheaper rates than during the boom. He took this advice, and the Paradise Springs golf course and clubhouse were not completed till the last quarter of 1992. Nara Holdings also showed a willingness to utilise local experience and take note of cultural sensitivities in the way it approached the development of the residential component of the Paradise Springs resort and the design of the clubhouse. The first residential section of the resort was on a 12.5 hectare site close to the amenities of the Robina Town Centre and was undertaken as a joint venture with the Robina Land Corporation. The land was developed for a mix of 240 detached houses and townhouses and then sold to builders who paced their construction activities according to local market conditions. As far as the design of the Paradise Springs clubhouse is concerned, Tadanori Nara sought a Surfers Paradise architect, Alan Griffith, who persuaded him to choose a design that drew on Queensland’s cultural traditions. The result resembles a spacious Queenslander type of house, rather like those found in some of the traditionally affluent districts of Hamilton and Ascot in Brisbane. The clubhouse rests on stilts, and has a high-gabled corrugated iron roof with a belvedere, as well as finials rising at strategic points along its ridgeline. The wide verandahs that ring it have railings decorated with white painted criss-cross shields and posts enhanced by post brackets and post moulds. Inside, the walls of the corridors, bars, lounges and

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meeting rooms are decorated with old photographs of the homes and farms of the local Mudgeeraba pioneers. Wicker furniture completes the picture of local historicism. The next group of Japanese investors identified in the table earlier in this chapter were the large industrial and trading companies. They included such global multinationals as the Matsushita Corporation (National Panasonic), Mitsui, and Toyomenka. These had established their presence in Australia through their core business in the decades before the 1980s property boom, but were caught up in the wave of property investment and, through their property arms, made their presence felt on the Gold Coast. The extent of their involvement and nature of their investment on the Gold Coast varied. Toyomenka’s involvement was modest; it developed a small 28 residence estate west of Southport. That of Mitsui and Matsushita Corporation was much more substantial. The construction arm of the Mitsui conglomerate, Kuji, joined with Japan’s largest consumer credit company (Orient Finance) to develop a 43 storey, 194 unit apartment complex at Paradise Waters. The building was given the name of ‘Grand Mariner’ and it rose towards the sky near the southern bank of the Nerang River, diagonally opposite the Rivage Royale. It was designed in a faux Art Deco style and, with its mauve colour, looked like a set from the ‘Miami Vice’ TV series that was popular in the 1980s. The advertisements referred to it not as a high-rise apartment building but as a ‘resort’. This illusion was heightened by its landscaping. This featured a large swimming lagoon with stepping stones set

The champion golfer Wayne Grady in an advertisement for the Royal Pines golf course resort. Source: MID Australia Pty Ltd

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into it — rather like a landscape feature in a Zen Buddhist temple garden — and, at one end, a neo-classical style gazebo defining its perimeter. Gold Coast architects saw Grand Mariner and Royale Rivage very much as the symbols of the huge budgets that the large Japanese investors at the time were able to play with. This meant they sought and got buildings that were unique in style and appearance and that made statements about the success and status of their owners.16 The other Mitsui investment on the Gold Coast was even more visible. In fact, this investment property came to symbolise everything that was good and bad about the property boom of the 1980s. It was the Sheraton Mirage, a luxury five-star hotel/resort on the southern end of the Spit at Main Beach. This was built by the Quintex Group, whose chairman was Christopher Skase.17 Skase was an ex-financial journalist who had left Melbourne in 1984 to seek his fortune in Queensland. With a speed that did credit to his fellow Australian Alan Bond and his Japanese counterpart Harunori Takahashi, Skase built up a large international tourist resort/media empire. Its Gold Coast jewel was the Sheraton Mirage. The Sheraton Mirage Resort had a quiet understated elegance, which gave it a certain cachet in relation to the other five-star hotels that appeared on the Gold Coast during the boom. Christopher Skase’s wife Pixy was greatly involved in all the details of its design and fit-out. The following describes the ambience of the finished hotels very well: Both Mirages [Gold Coast and Port Douglas] were magnificent resort hotels. They were low-rise buildings. Both featured a seethrough look in the foyer. As guests entered the Southport Mirage they could see straight through the picture window on the far side to the surf rolling in on Main Beach. Guests frequently halted in the middle of their arrival just to admire the view for a minute or two. The interiors were littered with objets d’art to delight the eye.18 It is not surprising that Mitsui was drawn to the style and panache of a businessman who could create such a prize-winning pair of resorts. Skase, in turn, was building and buying assets so quickly that a partnership with one of the most capital-rich companies of Japan would inevitably appeal to him. Mitsui formed a partnership with Nippon Shinpan, Japan’s largest credit card company, and, in February 1989, was able to buy a 49 per cent shareholding

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in Quintex Australia for $275 million. Mitsui and Nippon Shinpan saw this as their entry into a booming Australian tourist industry. However, Skase saw them as passive investors, and, when at the end of 1989 huge debts led to the rapid collapse of his business empire, Mitsui and Nippon Shinpan watched on idly.19 Soon after, in January 1991, the Japanese partnership was able to buy the other 51 per cent of Quintex Australia from the receivers for less than half the sum paid for their original investment two years earlier, namely $123 million. There is a point of view which said at the time that Skase mishandled his Japanese partners in the Mirage Resorts. Had he cultivated his relationship with them, they may have saved Quintex Australia for him.20 Mitsui and Nippon Shinpan entered the Gold Coast property industry through an investment in an already established, highprofile project. However, then Matsushita Corporation wanted to create its own project from scratch. Tsuneo Sekine, president of the property arm of the large electronics group, Matsushita Corporation (National Panasonic), had read about Sir Bruce Small’s vision of turning the Gold Coast into Australia’s Miami Beach.21 This attracted him there in late 1987 and within a couple of months, in March 1988, Matsushita Investment and Development Corporation (MID Corp.) had purchased the Holiday Inn in central Surfers Paradise. They rebadged it as an ANA Hotel, and so were able to lock it into the Japanese All Nippon Airways (ANA), the ANA hotel chain booking service and the ANA chain of travel bureaus in Japan. Within twelve months their hotel had reached an 80 to 85 per cent occupancy rate, with over three-quarters of the guests coming from Japan.22 However, like other Japanese corporate investors, Sekine wanted to develop his own golf course resort. As a result, MID Australia bought a 202 hectare site at Ashmore on the northern bank of the Nerang River, six kilometres west of Surfers Paradise, and developed a golf course resort. The resort was to have a 27 hole golf course, 650 homes set in 20 village clusters, a marina connected to the Nerang River and a 330 room five-star luxury hotel. It was given the name ‘Royal Pines’. As with many of the other Japanese projects on the Gold Coast, Royal Pines in many respects came to reflect the cultural values of corporate Japan. These can be summed up as follows: the desire for luxury, the strong competitive spirit among the companies, the need for each

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project to make a unique statement about the corporate investor who paid for it and, of course, the central role of the golf course in the resort. The 21 storey Gold Coast Prince Hotel became the visual focus of the Royal Pines Resort. In fact, it acted like a beacon far and wide in this overwhelmingly suburban residential area of the Gold Coast. It was designed to appear like a symbol of its company: looked at from the air its triangular shape could be said to resemble a pine tree, MID Corp.’s logo. They chose the pine tree because, according to MID Corp., it best expresses the company’s philosophy of the triangulation between human beings, buildings and nature.23 The landscaping of the public areas had a strong Japanese flavour. For example, the roadways within the resort were bordered by neat rows of trimmed bushes that were constantly shaped by gardeners so they would retain their sinuous rotundity. This gave the viewers a kaleidoscopic perspective of the landscape as they drove or cycled along the roadway. Such fleeting, changing visual images are very much a part of the traditional Japanese garden.24 As one entered the residential area of Royal Pines, one’s car was stopped by a guard popping out of a sentry box that looked like a Japanese teahouse. At the same time the visually dominant landscape feature chosen by the MID Corp. was its logo, the pine tree. At Sekine’s request, about 900 of them were planted all around the Royal Pines Resort. However, as both Shinko Corporation and Maruko Corporation found with their projects, the luxury market on the Gold Coast was not as large as they had hoped. As a result, MID Corp. reduced its planned total of homes from 650 to 545 and the number of village clusters from twenty to eight. Furthermore, the original intention of catering to the ‘top 5 per cent’ of the market was broadened to catering to the ‘top 10 per cent’. This meant that the price range of the homes being built increased from the original $800,000–$1,200,000 to $400,000–$1,200,000.25 The Japanese investor’s aim for the ‘top of the top’ had to compromise with Gold Coast market realities.

Moving from core business into Gold Coast property Apart from EIE — discussed in the previous chapter — and Mitsui and Matsushita Corporation, a number of other industrial and trading companies announced plans to make investments in housing/resort projects. These were a diverse selection of businesses that included Okachu (textiles), Brockson (chemicals), Calsonic

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(car exhausts), Narui Natin (woodchips) and Nifsan (plastics/media/banking). Of these five projects, all were planned to have over 500 homes, four had a golf course and three had a hotel. This gives a good indication of where the Japanese companies’ Gold Coast investment priorities lay. The next group of Japanese investors were the civil engineering firms, as well as companies active in building/construction in Japan and those who had established investment companies as a means of developing real estate projects during a boom where the sky seemed to be the limit. The euphoria that led to the establishment of such property investment companies is best seen when one looks at Axis. It was established by Bungo Ishizaki, the chief advisor and main business ‘go-between’ for Harunori Takahashi of EIE. Not satisfied with the large fees and commissions he was pocketing for his role in the huge EIE deals, Bungo went into partnership with a Gold Coast builder to establish Axis. His purpose was to develop a residential estate next to the site of the biggest deal he had helped negotiate for his EIE boss — Sanctuary Cove.26 Of similar ilk were two other companies established to develop residential resort estates — Hokojitsugyo Company and Liongain at Coomera and Pimpama respectively. Other Japanese business people or business partnerships who established such property investment companies bought development sites in the Surfers Paradise area and planned to build high-rise apartment blocks on them. It is perhaps more than a coincidence that the two who were most successful in holding on to their investments after the boom ended were those who bought existing commercial properties. This

Stage One of the Takashi Ohya and Shiro Iwase partnership’s housing development next to the Southport golf course (foreground). Source: Big Arrow Enterprises Pty Ltd

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meant that they could calculate the total cost of their investment from the start, and, during 1989 when the recession started to hit, they did not have as high a debt burden.27 Two Japanese with newly established property companies were particularly ambitious: TNN Gold Coast and Warcore and Cedric. They planned to build luxury five-star hotels in Surfers Paradise. The Warcore and Cedric proposal was for a 37 storey, $200 million hotel on the corner of Ferny and Ocean Avenues, whereas TNN Gold Coast bought a site a little to its west near Budds Beach. The grand plan for the Ferny and Ocean Avenue corner came to naught. At least the TNN Gold Coast proposal was built before the crash came. It is now the Gold Coast Marriott. But, within two years of its completion, the original owner had departed and the property was in the hands of its Japanese mortgagee bank.28 These were hardly stories of successful investment. Generally speaking, Japanese property investment companies that were successful on the Gold Coast combined some or all of the following characteristics: they had sound assets in Japan, which acted as security for loans and gave them a reliable and significant cash flow; they did not seek to develop grandiose projects on the Gold Coast immediately upon arrival; they familiarised themselves with the local property market; and they sought the advice of, employed or went into partnership with people knowledgeable about the Gold Coast property scene. Big Arrow Enterprises met most of these criteria. The driving force behind its decision to enter the Gold Coast property market was Takeshi Ohya, whose company in Japan had some very strategically placed and lucrative property assets. These were two office buildings in the centre of Tokyo’s financial district, Nihonbashi, as well as a golf course near the city’s Narita airport.29 He persuaded his friend Shiro Iwase, a financier, to enter into partnership with him to establish the property investment company Big Arrow Enterprises. This was to be the vehicle through which they planned to enter the Gold Coast property market.30 In 1989 the company purchased an 11.4 hectare development site on the western side of the Southport golf course. They immediately had a development plan drawn up for a $250 million project consisting of six to 15 storey apartment blocks that were to be sited around an artificial lake. Fortunately for Ohya and Iwase, that is when they met Jim West.

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West was a builder living in semi-retirement who had a sense of what would sell on the Gold Coast. He advised the company that people simply would not buy high-rise units that were so far away from the beach. He also told them that the Gold Coast property market had always been volatile and by 1989 signs of a sharp downturn were unmistakable. Hence, a large investment when the property cycle was turning downwards was very risky, and any development Big Arrow Enterprises undertook should be staggered; initially, they should limit their funding to a small number of homes and so test the market. Jim West’s advice was taken, and he in fact joined the company as a director. The project became a low-rise development of 256 detached and semi-detached houses to be built in five stages extending over four to six years.31 Big Arrow Enterprises had taken local advice and fundamentally changed its project to come closer to local lifestyles and the vagaries of the property cycle. There were a number of other Japanese building companies who sought to make Gold Coast investments. The amount they planned to spend, the type of investment they made and how much of their projects they completed successfully varied a great deal. There was no obvious pattern to any of it. The investments ranged from the purchase of a Main Beach site for a high-rise apartment block, another for a pair of somewhat phallic looking twin towers on either side of the Gold Coast Highway at the southern edge of Surfers Paradise, a restaurant and office building also on the Gold Coast Highway, to the purchase of the newly completed Scarborough Fair Shopping Centre in Southport. One building company, Towa Kohmuten Company, was more adventurous; they did what very few of the Japanese investors were confident enough to do. They went into the Gold Coast hinterland and in November 1987 purchased the Kooralbyn Valley Country Club on 4,000 hectares of land near Beaudesert. Towa Kohmuten Company then announced its intention to invest $24 million to convert a small rural retreat into an international country resort, with a 100 room hotel, conference centre, and a range of sporting and recreational facilities.32 Building contracts were let to local firms. As can be easily imagined, the huge wave of Japanese money into Gold Coast property projects had large spin-offs for the local building industry. Builders, carpenters, plumbers, electricians —

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even garden landscapers and interior decorators — had never done as well as during the 1980s boom. Not surprisingly, building costs rose during this time and this, combined with the high prices paid for development sites, made many of the Japanese projects on the Gold Coast economically fragile from the very beginning. The entry of Japanese civil engineering and construction companies would have perhaps made building costs on the Gold Coast more competitive, but they would have found tendering for contracts difficult. Different labour laws and practises, local networks between companies and tendering authorities would all be difficult to understand and penetrate for an outsider. The culture gap between Australian and Japanese practises was just too great. If, however, the Japanese civil engineering/construction firm had access to Japanese finance, it could devise projects or get contracts in Australia much more easily.33 This was the entrée for Kumagai Gumi. The construction industry in Japan is very hierarchical. Big projects, such as massive government capital works, go to companies at the top of a hierarchy based on turnover. In effect, in Japan, status is directly proportional to the scale of the project undertaken. For decades Kumagai Gumi was a relatively small, second-rung player in Japan. But it was part of the Sumitomo conglomerate of companies and so it was able to tap the funds of the Sumitomo Bank. This enabled it to finance and construct major projects outside Japan, which, in turn, would give it a higher position on the construction company pecking-order in Tokyo and the prospect of big government contracts.34 In 1980, Kumagai opened an office in Sydney, and in the decade that followed it featured prominently in major building projects throughout Australia. Kumagai’s initial construction contracts were mainly in the mining industry, but, with the advent of Japanese bank lending for overseas property investment, a whole new field of work opened up for them in Australia.35 The Gold Coast did not miss out. As the flow of Japanese tourists into Australia increased, Gold Coast business people became very keen to channel as many of them as possible into their home town. However, they quickly became aware that such affluent overseas travellers would want top-class amenities. There was a particular need for hotels badged by known international chains. By the mid-80s Kumagai Gumi was on the lookout for projects in Australia, and two Gold Coast businessmen, Richard Holt and Richard Graham, were able to attract this construction firm to fund and build a 23 storey

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international hotel on the corner of the Gold Coast Highway and View Avenue in Surfers Paradise.36 The importance Kumagai attached to gaining business in Australia was seen in that the company financed the $70 million project and that on the 14th of August 1984 its 93-year-old chairman, Jinichi Makita, flew from Tokyo to host the ground-breaking ceremony. The project was completed in May 1986, right at the start of the Japanese tourist boom, and became part of the Holiday Inn chain. This was to be the first of a number of projects Kumagai Gumi built on the Gold Coast. Japanese investors obviously found it easier to deal with a Japanese contractor, so Kumagai got a number of large projects, the biggest one being the MID Corp. funded Royal Pines Hotel and golf course. After Sanctuary Cove was purchased by EIE, the Japanese civil engineering/ construction firm was also contracted to build 119 homes at the resort.37 Networking is always a basic part of business anywhere and, in such an activity, nuances of behaviour and style are everything. Hence, cultural affinity makes it so much easier, and in the late 1980s on the Gold Coast Kumagai Gumi became a beneficiary of this. The scenario of the Japanese service provider becoming an investor was also found, not surprisingly, in the next category of investor: those in the travel, transport or tourism business in Japan. Companies that ran travel agencies, souvenir shops, bus companies or airlines in Japan saw the chance of establishing themselves on the Gold Coast as a step towards going global and then integrating their tourist service operations at an international level. Air travel from Japan could be connected to a popular destination on the Gold Coast. So we find that the tourist charter company Royal Airlines of Japan established a local company (Fedwood) and

The Paradise Centre rising behind the old Surfers Paradise Hotel on the corner of Cavill Avenue and the Gold Coast Highway. Source: J. Hajdu

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bought the Parkwood golf course at Musgrave Hill, as well as an 84 hectare site at Gilston for a resort. In this way the Japanese visitor would be flown to Australia by the company’s airline, and then could be channelled to a company owned golf course and resort. The Japanese travel agency chain back home seeking to own tourist accommodation on the Gold Coast was another variation on the internationally integrated business. Two chains of Japanese travel agencies bought or built hotels or motels to achieve such business synergies.38 In contrast, Sanpord, a Japanese timeshare and restaurant company, bought the 17 unit ‘Bilinga Palms’ in the Tallebudgera Valley and so was able to add another holiday destination to its selection on offer. In a similar way, the Otsu City restaurant company, K. K. Ataka Shoji, added another outlet to its chain when it purchased the Japanese restaurant at 3090 Gold Coast Highway. It was not only in reservations, travel and accommodation that the networks were established, but also in travel and duty-free shopping. All Nippon Airways went into partnership with the duty-free retailing van Brugge family to open a very chic duty-free shop at 21 Orchid Avenue in Surfers Paradise. Within the shop the most luxurious international labels were displayed in distinctive boutique settings. Tom van Brugge claimed that the Chanel boutique alone cost $60,000 and was part of a $2 million internal fit-out that included escalators from Germany.39 What features German lifts possessed that made them particularly exclusive was not revealed. A few months later, the van Brugge family sold an adjacent property to the OK Gift Shop company from Japan who wished to extend their outlets to the Gold Coast.40 They had already opened a shop in Cairns, after having expanded from Japan to Canada and New Zealand. The OK Gift Shop company at 25 Orchid Avenue felt that its shop would benefit from its closeness to the established competitor; van Brugge must have felt that such a symbiosis would work to its advantage as well. Finally, two Japanese transport companies bought properties on the Gold Coast. Not just any properties, but two that had an iconic quality to them. In September 1988 the Kishu Railway Company bought the Beachcomber Quality Inn. This was one of the first modern hostelries on the Gold Coast and in the late 1950s its wellpublicised poolside pyjama parties were seen to give Surfers Paradise a whiff of worldy sin and decadence.41

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Even more pivotal was the purchase made by Kokusai Motorcars: it bought the Paradise Centre on Cavill Avenue. This two hectare site encompassed the Gold Coast Highway–Cavill Avenue corner where Jim Cavill built the original Surfers Paradise Hotel. The first hotel on that site was opened in 1925 and quickly became the best known watering hole on the Gold Coast.42 If in Melbourne or Sydney the central points of the city have always been the town hall or general post office, then for the Gold Coast it quickly became the Surfers Paradise Hotel. It was from this site that the ripples of urban development spread outwards, and it was here that the gradient of property prices reached its peak. That this site should fall into Japanese hands showed the grand scale of their dreams for property acquisition and the seemingly limitless financial means to achieve it.43 The urge to diversify into property was also seen among the large Japanese finance, banking and insurance companies. The Excellent Life Corporation entered the Gold Coast property market, as some others from Japan had done, by buying a site in Main Beach for the construction of a luxury apartment block. The company no doubt hoped that its success in life insurance in Japan would be matched by success as a property investor in Australia. Two very large banking and finance companies exercised more caution and established partnerships with Australian firms. They no doubt hoped to mitigate their ignorance of local market conditions and, in general, the culture of Australian business, by establishing a partnership with an Australian company. The two Japanese blue-chip companies who followed this path were the large multinational financier and sharebroking firm Nomura Securities and the trading conglomerate C. Itoh.44 As Nomura had a very high status in the hierarchy of companies in Japan, so any partners for a Gold Coast venture would have to have a similar pedigree. Two such high-profile, blue-chip Japanese companies were found, Japan Airlines and Toyo Real Estate. The local company drawn into the consortium was one of the doyens of the Australian property industry, Lend Lease Development.45 These companies formed an entity called Jimna. Now came the task of finding a site and developing a project that would be a reflection of the status of these august companies. There was one such site, it was diagonally opposite the Paradise Centre, where the old Surfers Paradise Hotel used to be.46

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The time was now November 1988 and many in the Gold Coast property industry could see that the boom was coming to an end, the property cycle was starting to dip and a few projects were starting to be put on hold. In fact, the site that Jimna rushed to buy was on the market because an Australian company, the Ariadne Group, had got into deep financial difficulties. Nevertheless, Jimna paid the record sum of $65 million for this 1.48 hectare site. Not only that, but they spent another $30 million to buy up the leases of the small shopkeepers on part of the site, so that their premises could be demolished as soon as possible.47 Having bought into the centre of the Gold Coast at such a high price, these prestigious Japanese businessmen had to devise a project to match. This they set to doing with a vision that appeared to be honed in Hawai’i and California. By early 1989, their architects had finished the drawings for a lavish five-star, urban hotel/shopping complex. The hotel tower would rise from a three-level shopping centre, with a luxuriant tropical rooftop garden being the integrative element of the whole development. All this at an estimated cost of $480 million. So far the Japanese managers at Jimna had made little effort to inform themselves about the local economy of the tourist industry and what visitors looked for when choosing a hotel room at Surfers Paradise. Such realities started to hit them one by one. For the visitor to the Gold Coast, an ocean view from their hotel room was crucial, so in 1990 another set of drawings appeared in which the hotel became diamond shaped, much thinner and taller. In 1992, a third plan was produced. The five-star hotel lost a star, and, instead of 500 rooms, now only had 400. The number of shops, cafes and restaurants was halved, but 100 apartments and townhouses were included in the project. Furthermore, to produce cash flow these residential units were to be built first — by the early 90s, even the blue-chip Japanese companies were forced to learn how important a quick cash flow was. Also, the cost of the proposed project had shrunk to about $200 million. Then came another blow: the experienced Australian property giant Lend Lease Development decided not to take an equity in the project.48 Three years on we are in January 1995 at an interview with Akira Kikuchi and Isamu Okada, joint general managers of Jimna. The interview takes place in a small, understated, half-empty office

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in Cavill Avenue. They give the impression of having little to do, and sound pensive about the whole project. They both talk freely and one develops a point made by the other: We had to go the way we did … after spending $95 million on getting the site, we couldn’t just put a building on it for only $30–40 million … we wanted a top-class asset … but this was too good, too much for Australia with its economic cycles and tradition of make-do, self-help economical holidays … we thought this was like Hawai’i and California where luxury leisure–retail developments are an established feature of life … Australia is just too small.49 If Nomura Securities had grand plans for the Gold Coast, those of the finance arm of the Japanese trading conglomerate C. Itoh were grand in a more esoteric way. In the late 1980s the economic boom in eastern and southeastern Asia was approaching its peak. This was also the era when the Australian government was setting the pace to refocus the nation’s gaze towards Asia. The business community was encouraged to identify as many commercial opportunities in Asia as it could. Piggybacking onto the Asian boom was to be the guarantee of future Australian prosperity. One opportunity identified and to be seized by Australia was the provision of sophisticated professional services to Asian business and the rapidly rising middle class of Bangkok, Hong Kong and Jakarta. Australian engineers, architects, accountants, doctors and dentists were deemed to be world class, so why not encourage them to tap into the rapidly growing Asian market? It was this thinking that led to the plan for a Gold Coast Hospital of Excellence. The idea was to build a facility that would divert to the Gold Coast some of the estimated flow of about 30,000 wealthy Asian patients who went for medical treatment to the United States each year. In 1987 the Sydney-based Moran Health Care Group established a partnership with ACC (the finance arm of the Westpac Bank), and C. Itoh. They drew up plans to develop a medical clinic/hospital to rival the famous Mayo Clinic. They bought land at Tugun near Coolangatta and building commenced on a $250 million hospital complex with 300 beds, 10 operating theatres, 100 medical suites, not to mention an interconnected, 120 room, five-star hotel. The hotel would enable those who accompanied the patient from overseas to while away the time

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in appropriate comfort. Large notices were inserted in the metropolitan broadsheets to publicise ‘Australia’s World-Class Clinic’.50 As the building and then the fit-out progressed, the consortium ensured that the Gold Coast public was kept informed of what a gilt-edge asset was being created. PR statements talked of ‘the state of the art equipment’, such as a $5 million scanning machine imported from the United States, and the set of 25,000 candle-power surgical theatre lights that had just been installed.51 On one occasion Doug Moran in a press interview spoke of the world-class medical specialists who were being enticed to work in the clinic, ‘[an unnamed] specialist who is leaving South Africa for the Gold Coast [and] a very special plastic surgeon from Texas’,52 had already been hired. However, the grand scheme of placing the Gold Coast on the global healing trajectory of Asia’s wealthy was not to be. The business relationship between C. Itoh, ACC and the Moran Health Care Group collapsed in acrimony and ended in the New South Wales Supreme Court.53 The recession in Japan in the early 1990s and the very serious financial difficulties of the parent company of ACC, the Westpac Bank, obviously did not help. To create such a clinic with a worldwide reputation takes time and long-term planning. Out of the plan for a world-class clinic on the Gold Coast came a conventional regional private hospital.54 The Gold Coast was one of the places most affected by the collapse of the bubble economy in faraway Japan.

Individuals in the quest for property wealth In retrospect, it is easy to forget the suddenness with which the mass of the Japanese people became prosperous, and their ability to freely travel and spend overseas was even more sudden. For the post-1945 generation was locked into a tightly controlled world of hard work, company loyalty and playing their part in the national aim of rebuilding the country and catching up with the most advanced economies of the world like the United States. Currency controls limited overseas travel largely to those who were sent by the government or their private company to conduct its business in a specific foreign country. Scarce foreign currency reserves were apportioned to be spent on imports of industrial raw materials, crude oil and capital goods; in other words, commodities that would contribute to Japan’s national economic development. The idea that a Japanese individual could exchange his yen for American or

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Australian dollars to buy property in either country for his private benefit was beyond general comprehension. However, from the mid-1970s, with the rapidly rising balance of payments surpluses enjoyed by Japan, the people’s disposable income rose dramatically. This occurred especially after September 1985 as a result of the revaluation of the yen against other major world currencies. In less than a decade, the psychological horizons of the Japanese changed from one where foreign travel and the acquisition of foreign assets was beyond their wildest dreams to a situation where millions of them did travel outside Japan and the hard yen in their pockets made buying a meal, a souvenir, a dress or suit, or even a house or office building appear remarkably cheap.55 This has to be kept in mind when we consider the large number of individuals and families who went into property on the Gold Coast in the second half of the 1980s. The category in the table headed ‘Private company of an individual or family’ is very diverse. Old rich or new rich individuals who previously had no idea or opportunity of taking their money out of Japan now did so. Their personal and financial backgrounds in Japan had no common denominator. What they did have in common were assets like shares or, more commonly, land, on the basis of which they could borrow large sums for overseas property investment.

Advertisement for Belle Maison at Broadbeach with its French chateaustyle penthouse. Source: Gold Coast Bulletin

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A particularly asset-rich individual was Noriyuki Hanayama. He owned the Sony Centre in the Ginza area of central Tokyo. The boom of the 80s had pushed the value of this piece of real estate to over $1 billion. Even if he did have to borrow to fund further property investments, the security he was able to offer was about as solid as could be had in any city in the world. Hanayama bought the just completed Seabank Centre in Southport on 23 October 1987 for $13.5 million. The agent who handled the sale commented that Hanayama ‘was a charming man, he appeared to be a man of enormous wealth, this [Seabank Centre] was just a toy for him’.56 Before the year was out Hanayama in fact bought a home on the Gold Coast and settled there. He is generally regarded as the first private individual from Japan to have invested in Gold Coast commercial property. Others followed. They ranged from individuals who had a wellestablished family company in Japan to those who had hit the big time through the bubble economy. An example of the first type was Yodogawa Kanko, who through his family company bought the Ocean Blue motel/resort in Surfers Paradise. This was a middlerange, low-rise development that has quietly continued to turn a profit ever since. In a similar way, Yuichi Tajiiri, an architect from Kanagawa, had a family business designing and building small apartment buildings and compact offices. He arrived on the Gold Coast and continued to do much the same with projects in Ashmore and Southport.57 There were others who arrived as business immigrants and then proceeded to invest the capital they had brought into property. Toshimasa Tamamiza and Minoru Tokita were like this. They settled on the Gold Coast and established a joint company through which they then developed various small townhouse projects and, more recently, a two storey office building on West Burleigh Road, Burleigh. The experiences of these small Japanese investors showed that small family businesses or partnerships which did not, or could not, set their sights too high were able to achieve a steady or rising level of profitability. Most of these Japanese business people are still on the Gold Coast. However, this cannot be said of the Japanese individuals who were a product of the 1980s bubble economy or who had been successful in other fields and rushed into property during that frenzied time. Eikichi Yazawa the pop star, Masao Sen the singer of

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ballads, and Henry Kawada the tennis player all were forced to learn hard lessons about the vagaries of property markets.58 Some soared to great heights of wealth and success on the back of the inflationary spiral and easy credit of the Japanese bubble economy. Here the name that first springs to mind is that of Mitsuhiro Kotani. He was a sharebroker in Tokyo who during the boom had made a fortune through brokerage fees and, especially, through his own share buying and selling on the rapidly rising market.59 The value of his shares at the time gave him all the collateral he needed to borrow large sums of money from the banks. This he did not hesitate to do. Friends and business associates had drawn his attention to the Japanese money flowing into Gold Coast property. He decided to get a slice of it. He soon had his own company, Koshin Australia, and during 1988–89, in a period of less than a year, Kotani spent $90.3 million on buying Gold Coast property and development sites. He then committed to spending a further $600 million on a number of large projects on the sites he had bought. These projects ranged from a development site in Surfers Paradise on which he planned to build a luxury hotel, the purchase of a nearby apartment building, the acquisition of the Surfers Paradise Raceway site on which Kotani planned a residential estate, and finally, the most ambitious proposal, what else? — a $350 million golf course resort at

Belle Maison advertisement as a framed painting, ‘Napoleon would feel quite at home in this rooftop chateau’. Source: J. Hajdu

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Mudgeeraba. However, by the time all his development proposals were in place, the boom both in Japan and the Gold Coast was showing signs of becoming a bust. Mitsuhiro Kotani’s days of wealth and hubris would be numbered. Finally, the group called ‘Other’. There were a few Japanese companies whose core business was so far removed from their Gold Coast real estate activities that they do not really fit into any of the general categories discussed so far. Two deserve individual mention. The Senshukai Company had developed a successful mail-order retail business in Japan catering to the high-spending, young ‘office lady’ market. These were young, working, unmarried women who usually lived at home and had high disposable incomes that they spent on clothes, accessories and travel. It was this combination that led Senshukai Company to the inspired choice of marketing clothes, accessories and toiletries having the aura of France. Hence the company’s catalogue was given the title ‘Belle Maison’.60 However, Senshukai Company wanted to get into overseas property. It formed a partnership with the big trading house Nissho Iwai, and this led to a joint $75 million high-rise apartment project at Broadbeach. What was the name given to this building? Well, of course, ‘Belle Maison’. The association between stylish shopping and France was now extended to stylish living on the Gold Coast and France. Belle Maison made references to France not only in the decor of its public areas and the names given to the various types of apartments being marketed, but also, most visibly, in the lines of its silhouette. It was topped by a penthouse with numerous little turrets that seemed to say: ‘Look, I’m a French chateau in the sky!’ A case in point where the relationship between a company’s core business and Gold Coast property investment was even more esoteric was that of the Sundai Group. In Japan it had established and ran a large chain of ‘jukus’. These were afterschool coaching colleges to which many ambitious parents send their children in the hope they will get better marks in the competitive Japanese examination system. Sundai Group entered the Gold Coast property market rather late in the 1980s boom cycle; however, they appeared to have received sound advice, and their three and a half to four-star Surfers Paradise Travelodge Motel was able to find its niche in the local accommodation industry. Also, the development of their 88 hectare site in Merrimac has been staggered. The golf course was not opened till 1996, and the adjacent residential

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neighourhoods have followed slowly since then. In this way, investment has occurred since the local property market came out of the severe downturn of the early 1990s. The entry of such an eclectic assortment of Japanese individuals, partnerships, family companies, get-rich-quick consortia and global players was an astounding feature of what happened on the Gold Coast in the late 1980s. There appeared to be no clear pattern in who came and who invested in property. It was as if the constrictions of the frugal Japanese culture had suddenly been released and now the world was their oyster. A tradition of caution and hard-nosed ways of making business decisions appeared to be thrown to the wind as more and more Japanese with their wallets full of the hardest currency in the world flew out of Tokyo, Kansai, Nagoya, Fukuoka and Sapporo to acquire and develop land and property. This was an idea that until recently had been beyond their wildest dreams. On arrival on the Gold Coast they were faced with a foreign business culture and, more specifically, with the need to convert their desire to buy and build into a successfully completed transaction, or a project that met the required legal, engineering and architectural specifications. To achieve this the investor from Japan had to seek the help of local professional expertise. This was a group who have often been given the name of ‘gatekeepers’ at the interface between the foreign investor and the local market and community.

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‘Riches-to-rags a common tale in Japan after crash’, Courier-Mail, 31 May 1991. His major purchase in Australia was the Ritz Carlton Hotel in Sydney for $55 million. Gold Coast Bulletin, 22 May 1992. This canal estate was to be called the Rhode Island Resort. It was to consist of mainly 172 townhouses and, as the marketing slogan put it, ‘the project was expected to attract entrepreneurs and professionals whose lifestyle and work pressures favoured condominium living’.

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The Weekend Australian, 11–12 March 1989. Gold Coast Bulletin, 22 May 1992. The following sources were used: Lands Department, Brisbane; PRD Realty; Rider Hunt, Pty Ltd; Do Management Pty Ltd; The Australian; Gold Coast Bulletin; Australian Financial Review; Gold Coast Albert Regional Development Committee; Cityscope; personal interviews. The categorization of these investors is in some instances somewhat arbitrary. This is because during the 1980s economic boom in Japan many companies diversified from their core business into other areas such as tourism or property development. In such cases the original core business of the company is used in the categorization. Alan Midwood, Resident Partner, Rider Hunt Group, Gold Coast. Personal communication, 14 April 1994. Evidently part of the reason for this was that the head of the Australian office of any given Japanese company contemplating an investment in Gold Coast property was a person whose main attribute was that he could speak English, and usually he was not a senior member of the company hierarchy. So even if he accepted the Australian valuer’s or property assessor’s recommendations, the key decisions were made by the company president in Japan, who frequently ‘knew better’ David Kozik, Marketing Manager, Shinko Australia Pty Ltd, Personal communication, 25 October 1994. Gold Coast Bulletin, 19 September 1986. Meatpie: Japanese Tourist Magazine, Autumn–Winter 1992 . Gold Coast Bulletin, 3 April 1991. By 1990 Nara Holdings owned a resort in Tahiti, the Observatory Hotel in Sydney, and the Lilienfels Resort Centre in the Blue Mountains in New South Wales. John A. Wild, Group Commercial Manager, Nara Australia Pty Ltd. Personal communication, 28 June 1995. This assessment was supported by Alan Midwood, a valuer and property consultant with the Rider Hunt Group. Ron Burling, Director, Burling, Brown and Partners Pty Ltd Architects. Personal communication, 30 June 1995. Apart from the Sheraton Mirage built on the Gold Coast, the Quintex Group also developed a similar luxury resort at Port Douglas in north Queensland. Trevor Sykes, The Bold Riders: Behind Australia’s Corporate Collapses, Allen & Unwin, Sydney, 1994. The reasons for the collapse of the Christopher Skase companies are complex. However the accumulation of huge debts, partly to fund his proposed purchase of the MGM/United Artists film studio in Los Angeles, played a not insignificant part in his financial collapse.

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The Australian, 2 November 1989. Bruce Small was a Melbourne businessman who moved to the Gold Coast and made a second fortune there in land development. He was mayor of the Gold Coast from 1967 to 1978. It was during his time as mayor that height restrictions on buildings were relaxed and Surfers Paradise experienced its first high-rise building boom and so its coastal skyline started to assume an image like that of Miami Beach. See Alexander McRobbie, The Real Surfers Paradise, Pan News, Surfers Paradise, 1988. Bruce Barclay, Development Division, MID Australia, Pty Ltd. Personal communication, 18 October 1994. Matsushita Investment and Development Co. Ltd, The Harmonious Crossing of Man and Nature, Osaka, 1990. This issue is discussed in detail in J. Condon & K. Kurata, In Search of What’s Japanese about Japan, Shufunotomo, Tokyo, 1987. Bruce Barclay, personal communication. These are 1989–90 prices and to be able to judge their contemporary value a decade and a half later, the figures should be increased by 50–70 per cent. The development was to be called ‘Pinewood Lakes’ and was to have 184 townhouses. However, within a year of the commencement of development in October 1989, the recession in Japan led to its abandonment. Nishizu Australia Pty. Ltd bought an industrial property in Lawrence Drive, Nerang, and a retail outlet in Elkhorn Avenue in Surfers Paradise. The other long-term successful investor was Saitama Kogyo with the purchase of an office building in Carrara Street, Benowa. The mortgagee bank, the Long-Term Credit Bank of Japan, in turn collapsed in December 1998. This sent the Marriott into receivership from where in 2000 the Marriott management chain bought the freehold of the property for $63 million. This was about one-third of the development cost to TNN Gold Coast Pty Ltd. Takeshi Ohya’s company was called Showa Build Co. Ltd. Satoru Hashizume, President, Big Arrow Enterprises Pty Ltd. Personal communication, 27 June 1995. The first stage was called ‘Bronberg Court’ after the name of the finance company owned by Shiro Iwase in Japan. Courier-Mail, 26 January 1990. Dr N. H. Seek, Managing Director, Jones Lang Wootton Property Research Pty Ltd, Sydney. Personal communication, 23 August 1988. Peter Rimmer, ‘The Internationalisation of Japanese Construction Companies: the Rise and Rise of Kumagai Gumi’. Paper delivered at 26th Congress of the International Geographical Union, Sydney, 23 August 1988; Peter J. Rimmer, ‘Japanese Construction Contractors and the Australian States’, International Journal of Urban and Regional Research, vol. 12, no. 3, pp. 404–24.

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Among the best known were the $1.2 billion Melbourne Central office, retail and gastronomic complex; the $553.8 million Harbour Tunnel and $400 million Chifley Square office/retail project in Sydney and the ASER railway station casino conversion, convention centre and office/hotel complex in Adelaide worth $350 million. In the process Kumagai Gumi became a major hotel owner as well. For example, it built the Sheraton Hobart Hotel and the Observation City Resort in Perth, and bought and renovated the Hyatt Hotel, Canberra. It also prepared and funded feasibility studies for the Alice Springs to Darwin railway and the Very Fast Train between Melbourne, Canberra and Sydney. Alexander McRobbie, personal communication, 20 November 1992. Kumagai Gumi also built two neighbourhood shopping centres on the Gold Coast, the Pines and another at Carrara. Hideo Sawada owned the second-largest chain of travel agencies in Japan and in 1994 his company, HIS Investments Pty Ltd, opened the Watermark Hotel on the corner of Clifford Street and the Gold Coast Highway in Surfers Paradise. Whereas the Australian subsidiary of the Travel Planning Corporation of Japan bought the Broadbeach Motor Inn and the Casa Blanca Motel in Broadbeach. Gold Coast Bulletin, 4 November 1994. Gold Coast Bulletin, 24 February 1995. Alexander McRobbie, The Real Surfers Paradise, Pan News, Surfers Paradise, 1988, pp. 381–3. Alexander McRobbie, Gold Coast Heritage: A Multicultural Triumph, Pan News, Surfers Paradise, 1991, pp. 57–70. The property that Kokusai Motors bought had changed beyond recognition. The old hotel was demolished in 1983, and the whole southern side of Cavill Avenue now encompassed a podium building filled with shops, cafes and entertainment venues. From this rose three high-rise towers, two of them were holiday apartments, and the third the Ramada Hotel. It was this whole complex that Kokusai Motors bought in two stages for the total sum of $177.5 million. At the end of 1988 Nomura Securities was capitalised at 1.3 trillion yen, which even at the contemporary exchange rate of 100 yen to $A1 was a huge figure (Nomura Group 1989, Tokyo, p. 2). Initially Lend Lease became the project manager for Jimna with the option to take equity in the development. The site was on Cavill Avenue to the west of the intersection with the Gold Coast Highway, with its longest frontage being on Ferny Avenue. Dan McVay, Joint Managing Director, Richard Ellis, International Property Consultants. Personal communication, 21 October 1994.

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‘Lend Lease and Jimna trio in “amicable” split’, Gold Coast Bulletin, 5 November 1991. Akira Kikuchi, General Manager of Jimna Ltd. from Nomura Securities, and Isamu Okada, General Manager of Jimna Ltd from Toyo Real Estate. Personal communication, 9 January 1995. The Australian, 2 December 1989. Gold Coast Bulletin, 2 July 1990. Gold Coast Mail, 12–13 December 1990. Courier-Mail, 22 February 1991. The building and the equipment already installed in it were sold in October 1994 and now form the John Flynn Hospital and Medical Centre. Two other key indicators of this trend were the lifting of foreign exchange controls by the Japanese government and the fact that income per head in Japan peaked at $US23,190 in 1988; with that it exceeded the figure for the United States and West Germany. See William Horsley & Roger Buckley, Nippon New Superpower: Japan since 1945, BBC Books, London, 1990, Chapter 8. Kevin Nickalls (Baillieu Knight Frank) in Gold Coast Bulletin, 20 December 1989. Miyuki Tajiiri, quoted in an interview, 21 June 1995. To this list could be added Sadao Hishiki, a former baseball star in Japan. In 1991, through his company Brockson Pty Ltd, Hishiki started to develop a $123 million golf course resort in the Tallebudgera Creek Valley in Palm Beach. Within a year the withdrawal of credit from Japan led to the project being aborted. ABC-TV, ‘Four Corners’, 1 October 1991. Anna Freedom, Project Marketing Manager, Senshukai Company Ltd and Nissho Iwai Corporation. Personal communication, 18 April 1994.

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Chapter 5

The Gold Coast gatekeepers and intermediaries: help given to bond with Japanese buyers

THE ADMINISTRATIVE ASSISTANTS and tea ladies on one of the upper floors of this bank building — it could have been the Sumitomo, the Dai-Ichi, or the Long-Term Credit Bank in Tokyo’s financial district — were scurrying in and out of the boardroom. They were busy setting up a special function for the real estate division of the bank. Whiteboards, felt pens, pads, biros, slide projectors all had to be assembled, not to mention the cups and urn for the freshly brewed Japanese green tea that appears at some stage during any meeting that is likely to last beyond 20 minutes. This time, the reason for the meeting was that a representative of a real estate firm from the Gold Coast had come to make a presentation to the staff of the bank’s property division on the charms of the Gold Coast and, more specifically, how those charms could be enjoyed through the purchase of real estate there. As the

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talk progressed the speaker became progressively more focused on the contents of a folder that had been distributed at the start. The reason for that quickly became obvious: the folder contained a selection of Gold Coast properties that the speaker’s agency was selling. According to the speaker, purchase of one of these specific properties was the assured way of getting a part of the Gold Coast dream of affluence, space, sunshine, leisure and relaxation. But why fly in from Australia and not talk directly to the potential clients? In some instances the Gold Coast property sales emissaries did just that. However, they quickly realised that convincing the appropriate people at major banks was equally important. For, as one Gold Coast estate agent put it, ‘There appeared to be a symbiotic relationship between the Japanese investors and their banks’.1 Often it was not a case of an interested buyer in Japan choosing a foreign property and then going to his bank to persuade it to lend him the money to buy, but a matter of the real estate specialist of the bank seeking out properties for their clients to buy. In Japanese business culture the bank–client relationship was much more comprehensive than in Australia. The general financial success of the client appeared to be one in which the bank had a stake. In exchange the client showed unswerving loyalty to his bank. It is with this in mind that the Gold Coast realtor quickly realised that an initial presentation to key people in a bank was time very well spent. The impression got around the people in the Gold Coast property selling business that in Japan ‘the bank’s word was God’. If the bank advised the interested investor to buy, he rarely questioned it. This had another corollary: the bank took on board the property portfolio of the Gold Coast agency, and it was from this specific selection that the property specialist of the bank advised the interested client to buy. In this way the interested investor did not find out about the wide range of Gold Coast properties on the market, he made his choice from what was presented to him by his bank in Japan. He was channelled to specific properties, and so what he bought was related to which of the banks he dealt with in Tokyo and which Gold Coast real estate firm made the presentation at the bank. In this sense the bank in Japan, or at least its property specialist, became a ‘gatekeeper’ to the whole process of the Japanese investor buying real estate on the Gold Coast.

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Opening the gate for the investor The idea of the gatekeeper in an urban community originated in the social sciences.2 Gatekeepers are people who are in pivotal positions in the community, or in a specific business or profession in that community. They can be estate agents, town planners, financial advisors or architects on whose knowledge, skills and power the newcomer to a town may rely for money, information, permits or professional services. So, for example, his or her choices as to where they may buy or build, and what they buy or build, will be strongly influenced by the information and options such gatekeepers or professional intermediaries present to them. In the case of a person from another country, another culture, the role of such intermediaries would be particularly important. Few Japanese who were toying with the idea of investing in Gold Coast property had much idea of what types of property were available there, or how to knock their proposed project into shape.3 Enter the gatekeeper. Already, at the very beginning, at the point where the potential investor was sitting in Japan contemplating the idea of buying a property in another country, it was important for people in the Gold Coast property business to make sure that the client’s eyes would focus on their city. For a couple of decades prior to the mid1980s there had been Japanese involvement in the Queensland mining industry, but the Gold Coast and its potential were largely unknown to them. It was key intermediaries such as estate agents who went to Tokyo carrying details of their property portfolios who first made the Japanese aware of what the Gold Coast had to offer. There were a number of specific people in the property industry who were pivotal in attracting key Japanese investors to the Gold Coast. One of these was Geoff Burchill. Burchill, a civil engineer, had established a civil engineering/ planning consultancy on the Gold Coast in 1974. At a time when developers concentrated on the coastal strip, Burchill saw the potential of the inland fringe of the urban area for broadacre suburban development projects. He played a pivotal role in the planning of the two largest satellite city schemes of the Gold Coast, Helensvale and Robina. The latter was funded by Robin Loh from Singapore, and it was in 1984, in the office of Loh’s Brisbane lawyers, that Burchill was introduced to Shuji Yokoyama, president of Daikyo Kanko Corporation.4

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Yokoyama was a ‘golfing freak’ and asked Geoff Burchill to organise golfing sessions for him on the Gold Coast. Yokoyama soon decided that the Gold Coast did not have a sufficiently good golf course anywhere. He would just have to build one. Burchill was asked to help assemble land for such a project, following which, in 1985–86, Burchill Bate Parker and Partners designed the masterplan for Daikyo Kanko Corporation’s Palm Meadows golf course resort. In fact, at the beginning, Burchill went into a 50:50 partnership with Daikyo Kanko Corporation in the proposed development of Palm Meadows. For his part, Burchill saw this as an opportunity to take advantage of the 1987–88 Gold Coast property boom by pushing the rapid construction of houses on the estate, but Yokoyama resisted. For him profitability did not seem to be the overriding consideration, the world-class golf course was everything (see Chapter 3 for more details). So, by early 1989, this partnership had been terminated. In retrospect Burchill was quite philosophical about his experience with the president of Daikyo Kanko Corporation: ‘Yokoyama was not really interested in an Australian partner, he wanted to do it his way’. However, Geoff Burchill’s involvement with large Japanese investors was not limited to Palm Meadows. He was pivotal in the choice of site for Shinko Corporation’s Hope Island resort, as well as the initial plans for its development. His office was also involved with the engineering assessment of what became the Matsushita Corporation’s Royal Pines at Ashmore, after which his office drew up the development plans for the golf course resort on that site. However, against Burchill’s advice, at both Hope Island and Royal Pines their Japanese owners went upmarket with consequences that were detrimental for the smooth development of each project (see Chapter 4 for more details) Burchill had been acting as an intermediary and professional consultant for various Japanese right throughout their period of investment on the Gold Coast. In 1985 he started going to Japan for Daikyo Kanko Corporation, and for Shinko Corporation in 1987. This gave him and his office a great deal of publicity there and led to invitations to speak at various company board meetings to which he took Gold Coast investment proposal packages. He was also invited to speak at various public seminars on economic and tourism development in Australia.5 The contacts Geoff Burchill was able to make, and the general boom in Japanese

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Max Christmas in his office on Orchid Avenue, Surfers Paradise. Source: Max Christmas Real Estate Pty Ltd

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property development at the time, encouraged him in 1988 to open an office in Tokyo. Commissions to prepare plans for resort projects in Japan, South Korea and the Mariana Islands followed. On the Gold Coast, Geoff Burchill acted as an intermediary and professional consultant to some of the largest Japanese investors and helped to crystallise their ideas for projects at specific sites, and, in turn, they opened doors for him in the Japan of the bubble economy. The other crucial local intermediaries who helped to attract Japanese money to the Gold Coast were the business partners Richard Holt and Richard Graham. Their success in getting Kumagai Gumi to fund and build what became the Holiday Inn in Surfers Paradise led to the raising of the Gold Coast profile in the eyes of the Japanese.6 Also, by the early 1980s, some people in the Gold Coast hotel industry sensed a potential bonanza as they heard about the rapid rise in the number of Japanese tourists travelling overseas. In 1982, the Surfers Paradise Quality Inn sent its marketing manager to Tokyo and Osaka to make contact with a series of travel agencies. Other hotel/motels followed suit. Publicity to attract tourists meant that the Gold Coast became known among more and more people in Japan and that had spin-offs for the flow of investment. It was this

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spin-off that was obviously of great interest to the Gold Coast real estate agents. One of these agencies was in the centre of Orchid Avenue in Surfers Paradise. It was owned and run by Max Christmas. If there was one thing Max Christmas was good at, it was getting publicity. As the flagship of the national Australian press commented on one occasion: If this highly energetic agent isn’t swanking about Surfers Paradise in top hat and tails to celebrate record sales from his property group, he’s flying journalists in from all over the country to launch his yearly survey of Gold Coast property … This week was no exception. There he was our Max, posing on a golf course to not only celebrate his 50th birthday, but also sales of more than $1 billion by his company Max Christmas Pty Ltd in the past year.7 There was a sense that not much happened on the Gold Coast property scene without the involvement of Max Christmas. From new developments on the city’s fringe to commercial property sales in prime locations and deals involving the most exclusive mansions on the coast, Max Christmas was in the thick of it. He was not just the major estate agent on the Gold Coast, he had also built up a large private property portfolio. Christmas appeared to be juggling his own holdings as frequently as those of his clients. And it all began with the Weet Bix packets and surfing. In the 1940s, as a small boy, Max was fascinated by the pictures on the cards in the Weet Bix breakfast cereal packets. They showed Rolls Royces, Jaguars, Porsches, Ferraris, Maseratis and such. ‘I started wondering why I’d never seen such cars in the suburb where we lived … there must be another way to live I thought’.8 At the same time his father took the family for a holiday every year to the beach in Coolangatta where Max learnt to love the water. As a teenager he started surfing on the Gold Coast and wanted to join one of the surf and life saving clubs there. He could have joined any of the clubs on the Coast, and as he said, ‘I went and joined Northcliffe Surf and Life Saving Club because they had a team of guys with a speedboat and surf boards’. Two streets away from the clubhouse was Old Burleigh Road where many country graziers spent their holidays. This was just after the 1950–51 wool boom, ‘and they all seemed to have Rolls Royces and Jaguars, so by chance the surf board put me within striking distance of these motor cars on the Weet Bix packets’.

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The other thing Max noticed about the graziers was that they were all interested in real estate, ‘so at the age of 16 or 18, I ascertained that real estate was good, it wasn’t dirty work and all the wealthy people had plenty of it’. In fact, the president of the Northcliffe Surf and Life Saving Club was a big real estate agent, ‘he had a Jaguar car and a nice house, looked very smart, and he had a Spanish wife and two lovely daughters, and they went to the best school’. This proved it; for Max, real estate was ‘the way to go’. He started dabbling in real estate. He bought and sold building blocks at a profit, then went on to speculating with small blocks of flats. At the same time he was employed as a salesman by the most successful Gold Coast real estate firm of the time, that of Laurie Wall. In 1971, Max Christmas was able to establish his own business, and it has been his private real estate company ever since. Photos of Max’s bald pate, smiling eyes and infectious grin became synonymous with the company logo. He was able to ride the boom and bust cycles of the Gold Coast property market more adroitly than most, so the business that started with a staff of five and an annual turnover of $8 million in 1971 had 140 staff and a turnover approaching $1 billion two decades later.9 A major reason for his success was ‘being quick on his feet’, of seeing opportunities before his rivals did. This was graphically illustrated in his response to the appearance of Japanese investment capital on the Gold Coast horizon. Max Christmas first went to Japan in 1985. He was quick to sense the potential of Japan’s increasing disposable wealth, and especially the significance of the removal of exchange controls on the yen and its revaluation in September 1985. His initial visit was pre-planned by the Queensland Government Agent General’s Office in Tokyo. He was given help in the setting up of meetings with businessmen and bankers. In the eyes of the Japanese such ostensible government endorsement could only be an advantage. Max Christmas also quickly realised the potential of a taxation change the Japanese government announced in April 1988. From 1964 onwards, the government in Japan had sought to mobilise the savings of its citizens for national development by giving generous tax concessions to their postal savings accounts. These accounts known as ‘maruyun accounts’ were very widely held among the Japanese population and, with their very high rate of savings, contained the seemingly astronomical sum of $A3.4 trillion.10 These tax concessions were now scrapped, and in their property presentations and investment

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seminars Max and his colleagues emphasised the financial advantages of parking this newly to-be-taxed money in offshore property instead. Where? On the Gold Coast of course. Looking back, Max felt that many Australians went to Japan full of arrogance: ‘You know, you’re yellow hordes, scum, we’re superior … it’s all in the Aussie body action … the White Australia policy said it all. Even my mother used to say, “Why are you dealing with them?” … I believe the Japanese “took to me” because I didn’t go there with prejudices in my blood as some other people did. I told them how I admired what they’d done with their country and that we could learn from them.’ For the next five years he or his senior staff visited Japan five or six times a year. The presentations of their Gold Coast property portfolio led to a steady stream of sales. There was even more: the development of personal contacts at the Mitsubishi Corporation led to a partnership between Max Christmas and a Mitsubishi subsidiary, the Pasco Corporation. A year later, a spokesperson for Max Christmas claimed that they had earned $20 million in commissions on Gold Coast property deals through this partnership.11 However, the most important and longest business association between Max Christmas and a large Japanese investor was that with the Matsushita Corporation of Osaka. Tsuneo Sekine, president of MID Corp., the property arm of Matsushita, visited the Gold Coast to reconnoitre the place for possible property purchases (see Chapter 4 for more details). As soon as Max Christmas heard of Sekine’s visit he flew to Japan to see him. He took with him details of possible resort sites at Robina, Ashmore and at Runaway Bay on the Gold Coast. Sekine was persuaded that the 202 hectare, low-lying, ex-dairy farm six kilometres from the coast at Ashmore had the potential to be the location of a five-star golf resort. It had been assembled by land developers who’d crashed at the end of the 1979–81 boom and the ANZ Bank as mortgagee was very keen to offload it. MID Corp. paid $12.5 million for the site. The association between Max Christmas and Mid Corp. continued after the initial sale. His agency became the sales agent for homes on the Royal Pines golf resort that were released onto the market during the 1990s, as well as its general property advisor. The relationship with Sekine and MID Corp. was one that Max Christmas referred to with great pride. A feature of Max Christmas’ office on Orchid Avenue in Surfers Paradise was a photograph of himself with the chairman of the Matsushita Corporation Board and his family.

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Frequent visits to Japan to meet key individuals, companies and their banks and make them aware of what Gold Coast property had to offer, and to present details of their own real estate agency’s portfolio, became a feature of the work routines of senior staff of all the main property firms.12 In 1994, one Gold Coast real estate executive estimated that during the previous eight years he had been to Japan at least 80 times.13 They took the need to network with the Japanese and to establish a personal relationship with potential clients to heart. A number of Gold Coast estate agencies also established a ‘Japanese Desk’ or appointed a ‘Japan Manager’. These positions were filled by a Japanese person, or at least a Japanese speaker, who it was hoped would help to smooth the path of property negotiations. A good example was Etsuko Bishop at PRD Realty in Surfers Paradise. Etsuko had married an Australian, and she and her husband had arrived on the Gold Coast in 1983. She had initially taught Japanese at the Gold Coast TAFE College before getting a position with PRD Realty. She explained that her Japanese clients knew they were bringing ‘top money’, so they expected the best service. Here, speaking Japanese was crucial, as was the need for the Japanese to feel that they were dealing with a real estate person of comparable status. Hence, some time after her employment, PRD Realty had created the title for her of ‘Director, International Division’. This enabled any Japanese coming into the office with a keen interest in property to feel that they were talking to a senior member of staff. In turn Etsuko felt that this enabled her to respond to her Japanese clients’ preconceptions about status and business hierarchy in the appropriate manner.14 During this period of large Japanese investment in Australian property all sorts of manuals, seminars and personal consultancies purveyed advice on the cultural differences between the Western and Japanese way of doing business. The idea ‘that culture and property went hand in hand’ became conventional wisdom. ‘We must understand the background and thinking of the people we are dealing with’ became the maxim. More specifically, it was impressed on the Australian property sales people that ‘to do deals one must develop human bonds which led to a common understanding of basic contractual expectations.’15 Through their dealings with their Japanese clients, Australian property negotiators gained some interesting insights into Japanese

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business psychology and group dynamics. Peter Lacey of the Richard Ellis property agency in Surfers Paradise had been on the other side of the negotiating table with Japanese clients on numerous occasions. His view of the Japanese mind-set and approach to negotiations is revealing: They [Japanese negotiators] are thorough and diligent, but this does not unearth all the relevant information for them regarding the proposed purchase. The lateral thinking, the flexibility which are part of dealing in property, they cannot do. They are narrow specialists. They cannot think in terms of options. Task areas are apportioned among them, and they are incapable of going outside these. Each guy has his job. They assess and then they decide. If Australians valued the person working in property sales for their ability to see the issue from all sides and because of a quick grasp of the twists and turns of the negotiating procedure, then the Japanese made decisions on the basis of collective wisdom. To again quote Peter Lacey: The president of the company convenes the board meeting. Once they are all there, he asks each person who has been a party to the negotiations to ‘say his piece’. He then locks them all into the decision to purchase. The decision then becomes their collective responsibility. Their word becomes their pledge. They are quite unable to react quickly to a changed situation. For example, when the Gold Coast boom suddenly turned to bust, most Japanese were frozen into their previous positions and didn’t know how to respond.16 If the Australian property people were somewhat perplexed by the Japanese way of doing business, then, in turn, their Japanese clients came to the Gold Coast with little grasp of the free-wheeling business culture of the Gold Coast property industry. For the Australian property people, negotiating skills, timing and flexibility were everything. Everything (at least nearly everything!) could be had with the right property, with the right buyer, the right agent, at the right time. This the Japanese did not know — they had no business culture of bargaining and, most importantly, their negotiating skills with agents were not well honed. The initial price quoted was often taken at face value.17 Their feelings of superiority, underpinned by the easy credit from Japan and the hard yen, also did not encourage close scrutiny of the bottom line of property deals. Local agents and vendors of property could not believe their

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luck. There were frequent rumours of there being two prices for a Gold Coast property, the ‘normal price’ and the ‘Japanese price’.18 However, the Japanese did learn, so that by the beginning of the 1990s they were starting to look at the Gold Coast market more cautiously; but what also encouraged this new financial sobriety was that by then the flow of credit from home was becoming much slower than three or four years earlier.19 The price suddenly mattered. There were two other influences at work with Japanese property buyers which showed their culture gap in relation to the Gold Coast property scene. Firstly, their command of English was usually not strong, and, secondly, even if they did speak better English, they rarely did what Southeast Asian Chinese investors did, and that was seek property advice from a variety of sources. They relied on the Gold Coast contact recommended by their bank in Japan, or on personal introductions they had gained on arrival on the Gold Coast. The result was that they had only one set of advisors or intermediaries as they approached making their decision to buy. This reliance on one agent or property consultant highlighted another cultural difference between the business culture back in Japan and that of Australia, namely the role of the estate agent. In Australia, the estate agent is clearly the agent of the vendor. He earns his commission from the person on whose behalf he has sold the property. His role is clearly understood and unambiguous. However, in Japanese business culture, the estate agent is much more a mediator. He acts for both the vendor and the purchaser and sees his task not as achieving the highest possible price for the owner whose property he has been engaged to sell, but to arbitrate a deal that is satisfactory to both the buyer and seller. His mediating role is seen by the fact that his fee is paid by both parties.20 When the Japanese buyers came to the Gold Coast and approached an estate agent, they assumed that he would have the same role as that which estate agents had in Japan. Thus, they sometimes disclosed a lot of information to the agent that a buyer who knows the Australian business culture would never do. For example, how far up or down they were willing to go with the price. Needless to say, an agent acting for his vendor would find such facts of inestimable value. Many Japanese buyers eventually no doubt got wind of their misunderstanding, but not before they had ‘paid a price’ for their ignorance. For, as Grayson Perry of the Gold Coast Regional Development Committee remarked, ‘It was not in the interests of the Gold Coast estate agent to tell them, was it?’21

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The Japanese property buyer was not, however, completely dependent on Australian gatekeepers and intermediaries. Towards the end of the 1980s a few solicitors, estate agents and architects did arrive from Japan. Their presence in Australia throws some interesting light on this fascinating episode of Australian–Japanese contact. One of these Japanese professionals was the solicitor Kotaro Matsuda.22 Matsuda felt from the beginning that he was more interested in and found it easier to live and work in a foreign country than most other Japanese. He had an uncle who, as an agricultural expert, had researched and worked in the United States, and another relative had studied outside Japan as a Colombo Plan student. His contact with Australia began in 1965 when he visited Brisbane as a naval cadet. During his stay, he was hosted by a number of legal families there who were very hospitable to him and with whom he subsequently stayed in touch. Matsuda then completed law studies in Japan and taught at the naval academy. In 1982, one of his Brisbane contacts asked him to do some legal work involving Japanese clients. This rekindled his fond memories of the country and he decided to migrate to Australia. He became a law clerk in Brisbane while he repeated much of his legal studies there. He completed this successfully and was admitted to the Queensland Bar in 1989. He joined the Brisbane/Gold Coast legal firm of Feez Ruthning and in this way became involved with a number of property transactions, as well as a few legal proceedings, that involved Japanese investors on the Gold Coast. Matsuda was of the opinion that particularly at the beginning of the investment boom, in 1986–87, the Japanese coming to the Gold Coast to buy real estate were very ignorant of local business procedures and practises, not to mention many basics of the legal situation regarding property.23 The result was that they were unable to evaluate the advice they sought and got from agents and local Gold Coast solicitors. This advice was more often than not much less objective than self-serving. He even pointed his finger at one or two small, ‘fly-by-night’ real estate agents from Japan who went into league with their local counterparts and solicitors and ‘managed’ the purchasers between them. The result of this was that at no stage of the transaction was the Japanese buyer able to get an impartial opinion. Such agents discouraged the Japanese buyer from using a Japanese-speaking solicitor such as Matsuda, ‘He is not

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a qualified lawyer, so you can’t trust anything he says’, was the usual putdown. Matsuda felt that his most important task with the Japanese clients on the Gold Coast who did seek his advice was to explain the Australian legal culture and the business methods of the Gold Coast property industry. As with estate agents, the role of solicitors in Japan was also in some ways different. In Anglo-Saxon culture the client remains in direct charge throughout the proceedings and the solicitor takes instructions from his client item by item. According to Matsuda, in Japan the lawyer has ‘professional power’ which the client expects him to use on their behalf. This places the solicitor in charge of the negotiations to finalise the deal. The client has trust in his solicitor to thrash out the details to his, the client’s, advantage. To assume such a stance with Australian solicitors on the Gold Coast with a language barrier between them and their client, not to mention different ideas about the client–lawyer relationship, meant that the outcome for the Japanese client could be problematic. But at the time, the freely flowing yen made such considerations, as well as many others, less acute.24 Potential Japanese investors did have the option of bringing their own service professionals with them. Flying around the Pacific with his entourage on board, Harunori Takahashi of EIE came close to doing it this way (see Chapter 3 for more details). Some other companies came with their own consultant, architect or financial advisor. In this way, the youthful Zin Sawachika arrived on the Gold Coast in 1985. Sawachika arrived with Shuji Yokoyama, president of Daikyo Kanko Corporation. He was an architect and had accompanied Yokoyama to initiate the design work for Daikyo Kanko Corporation’s major hotel project in Surfers Paradise. They subsequently parted company and Sawachika stayed on the Gold Coast and established his own property investment consulting company called the Japan Management Corporation. With his good command of English, Zin was able to gain an insight into the nature of the Gold Coast property market as well as the intricacies of the local property industry networks and modes of action. So, by the end of the boom, he had a growing list of clients seeking his advice. He became a consultant to the Mitsui Construction/Orient Corporation consortium, which sought his advice about a plan to construct an iconic high-rise apartment building on the Gold

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Coast. He advised them to build two shorter towers instead. In this way, the launch of the apartments on the market could be staggered in harmony with Gold Coast market conditions at the time. His advice was rejected and the mauve-coloured, Art Deco style Grand Mariner was the result.25 His observations about the investment decisions of his fellow Japanese are revealing. A selection of comments illustrates the tenor of his views: [At the beginning] banks in Japan were quite inexperienced in lending for overseas property purchases and the Gold Coast became part of this crazy situation. During the boom phase the euphoria among Japanese companies and private investors in property was so great that even experienced people made mistakes. They came here [the Gold Coast] with very little knowledge about this place and what was possible here and what not.

Eventually, Zin Sawachika decided to take the plunge into property development himself. He felt that at the end of the 1980s property binge a modest scheme was called for. He chose a canal estate site at a favoured central location, namely around a cul-de-sac at Broadbeach Waters, only half a kilometre from the Gold Coast Highway and Jupiters Casino. It was central, yet secluded and manageably small with only 32 apartments in two three-storey buildings. He had learnt the lesson about the difficulties of marketing high-rise away from the beach. Behind the coastal strip of the Gold Coast the suburban house reigned supreme. A second

Japanese language advertisement for the Art Deco style Grand Mariner high-rise apartment complex at Paradise Waters. Source: Kuji Pty Ltd

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or third storey apartment at a good location was as far as the potential buyer would go for the sake of a canal frontage and a landscaped setting. That was one of the realities of the Gold Coast market at the end of the 1980s that Zin Sawachika had realised.

Help converting the property dream into reality However, during the 80s boom the large budgets of many Japanese companies and individuals, and the lavish dreams of property development in which this enabled them to indulge, changed much of the Gold Coast property scene. Prior to the mid-1980s it was local, Sydney and Melbourne money that drove Gold Coast development, and their formula for business success was based on tight budgets and quick profits. The arrival of the Japanese developer changed this to one of lavish budgets to create projects of world standard. The word got around that the Gold Coast was where the architect and resort designer could make their avantgarde mark. This attracted a number of Japanese, ex-pat Australian and other service professionals to seek work there. One example was Yoshiro Hasegawa and his architectural firm Interplan. It had specialised in resort/residential and resort/hotel projects. He started his firm in 1983 when he got the commission to work on Tokyo’s Disneyland. In the years that followed, his firm, now located in the chic Shibuya district of Tokyo, was able to gain design work for hotels and tourist resorts in Okinawa, Guam, Korea and Indonesia. Hasegawa then decided to enter the tourist project market in other regions around the Pacific basin. By 1990, Interplan also had an office in Orlando, Florida, as well as in Ann Street, Brisbane. From these offices Hasegawa and his staff were able to get design work in the prime tourist/leisure regions of the United States and Australia. He had been able to build up his architectural practise into a global network, of which southeast Queensland was a part. By the early 90s, Interplan was working on both commercial and residential projects in both Brisbane and the Gold Coast. Hasegawa saw himself very much as the cosmopolitan Japanese service professional. ‘To each of our projects in Australia, we brought a little Queensland, a little Japan … an international style,’ he commented.26 A small number of other Japanese architects were also drawn to the Gold Coast, one or two came with the designs of the projects of their Japanese clients in their pockets, others saw job prospects in the property development boom that their fellow nationals had

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triggered. Work in their professional field, combined with the appeal of the Gold Coast lifestyle, was an enticement hard to beat.27 Suddenly the Gold Coast was seen by people as being in the league of global international resorts — Miami, Hawai’i, Tahiti, Acapulco, Bali, the Gold Coast … It became a place where topclass tourist infrastructure was being designed and developed. This came to the attention of not just Japanese architects but also some from North America, not to mention ex-pat Australians. The most prominent of these was Des Brooks. Des had been living and working as an architect in Honolulu for 18 years. He was therefore very familiar with building and landscape design for tourists and leisure living. One could in fact argue that Hawai’i had invented much of it. His credo, ‘… architecture should be a bit of fun, you know,’ was exactly what leisure ambience and postmodern pastiche really amounted to.28 His dapper appearance in lightweight suit, pin-striped shirt and bow tie set the appropriate image for the Gold Coast projects he designed. In the late 1980s, nearly all of these seemed to have been made possible by Japanese money. Later, he described these with great flamboyance and gusto. The project about which he spoke with greatest pride was the Gold Coast Mirage Hotel. His imagery was particularly evocative: The building [the Gold Coast Mirage Hotel] is almost incidental to what’s happening around it. You drive up and you know there’s drama where you drive up … you look out and there’s the ocean … we wanted to create a theatre, because everybody knows we got the stage which is the ocean. So you notice that every element in the hotel, all the restaurants and the bars, the reception, everything, all sort of sit around like an opera house, all focusing on the stage which is the ocean … why compete with the landscaping, and the ocean and the water and the waves? The sails that form the roof of the adjacent Marina Mirage shopping centre continued the references to oceanic spectacle as the architectural theme of the complex. Des Brooks regarded the Gold Coast Mirage as his best piece of work on the Gold Coast. Mitsui and Nippon Shinpan of Tokyo just had to have it. One lavish project led to another — the Gold Coast International Hotel for Shuji Yokoyama of Daikyo Kanko Corporation, the Prince Hotel at the Royal Pines resort for

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Architect Des Brooks Source: Courtesy Courier-Mail

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Matsushita Corporation, and the Gold Coast Marriott for the Japanese TNN Gold Coast development consortium. In designing the Marriott Hotel in Surfers Paradise, Des Brooks’ Hawai’ian experience seemed to have played a part. It had a mix of colonial Southeast Asian ambience, including touches of the Raffles Hotel with its rattan furniture and punkah fans gently swinging from the ceiling, as well as the flavour of the South Seas. The ground-floor lounge and restaurants opened onto a landscaped lagoon that was in the middle of the city but cleverly screened from the highway. This conjured up visions of the Halekulani Hotel in Honolulu. Only the lavish budget of Japanese yen made this extravaganza possible.29 Des Brooks was also involved with two other Japanese projects on the Gold Coast: the Grand Mariner and Belle Maison high-rise apartment buildings (see Chapter 4 for more details). However, his DBI Design Corporation ‘inherited’ these as half-completed projects in July 1991 from the collapsed Hulbert Group of leisure resort architectural designers.30 Thereby hangs another tale of globalised entrepreneurship that did not outlast the 1980s property boom. The Hulbert Group had offices in Vancouver and Miami and they had developed a reputation for innovative resort and residential designs. The firm was drawn to the Gold Coast by Mike

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Gore, that local businessman whose dreams of luxurious resorts were a match for anything that the entrepreneurial products of the Japanese bubble economy had sought to achieve (see Chapter 3 for more details). In his quest for the latest ideas for a residential resort on his swampland site, Mike Gore went to North America and was persuaded to visit Vancouver. There he was impressed with the way the rundown inner suburban area of Granville Island had been redeveloped as a trendy urban village. Rick Hulbert, a local architect, had been one of its developers. Gore was determined to tap his skills. Mike Gore ‘walked into his office, as he usually did, with all guns blazing and confronted him by saying, “First let me say I think f…g consultants are a bunch of wankers, they cost too much. But I like what you do. I don’t want you to give me any bullshit. I just want you to sell me the plans”.’31 However, Rick Hulbert was not intimidated and was able to persuade Gore to hire the Hulbert Group as his chief architect/planner of Sanctuary Cove. In March 1984, Rick Hulbert and a colleague came down to the Gold Coast to inspect the Hope Island area. Gore took them to the resort site in a helicopter. Rick was still wearing his Vancouver tweed suit and, as the helicopter hovered one foot above the ground, he stepped out and sank up to his knees in mud. ‘That was the start of our work on Sanctuary Cove,’ noted Brian Toyota, a partner in the Hulbert Group. The office of Geoff Burchill had already done the basic engineering designs for the site, but the planning and development of Sanctuary Cove now became the responsibility of the Canadian Hulbert Group. In October 1985, they established an office at Southport on the Gold Coast from where the two directors worked on the project around the clock. They were Bill Jackson, who did the administration and marketing, and Brian Toyota, the architect and designer. Gore gave them the responsibility for doing the concept plan for Sanctuary Cove, as well the specific designs for some of the key components of the resort. This included the fivestar hotel and the ribbon of houses around the semi-circular marina. To achieve this, Jackson and Toyota assembled a team of staff at the Southport office, as well as using their North American networks to attract golf course design expertise from Vancouver, a landscape consultant from Hawai’i and an interior designer for the Sanctuary Cove hotel from San Diego.32

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As a result of much frenzied activity, Sanctuary Cove was ready for Mike Gore’s ‘Ultimate Opening’ on the 9th of January 1988. After its sale to Harunori Takahashi’s EIE, the Hulbert Group continued its association with Sanctuary Cove. They designed the clusters of hilltop houses overlooking the golf course that EIE wanted to market in Japan. ‘We worked with EIE to create a house type that would appeal to the Japanese buyer. They packaged each house with a golf club membership. I think they even threw in a golf buggy as well,’ commented Brian Toyota. The publicity around Sanctuary Cove meant that the Hulbert Group became known throughout the whole of Australia, if not beyond. The originality of their Sanctuary Cove design and the high-quality of its execution established the Hulbert Group’s office on the Gold Coast as the prestigious architectural/design firm for tourist/ residential projects. Soon large commissions from major Japanese investors started flowing in to their Southport office. Mitsui/Orient Finance, the Senshukai Company, the Calsonic Corporation, the Hokojitsugyo Company … they all wanted their large Gold Coast projects designed by the Hulbert Group. The Hulbert Group’s office began the design for the 43 storey, $150 million Grand Mariner project in Paradise Waters. Mitsui/Orient Finance instructed them ‘to do a landmark … a building that once it’s done doesn’t melt into the rest of the skyline, people should always know its there’. The Hulbert Group had a Miami office, hence the idea for the faux Art Deco design. Toyota made a special trip to Tokyo to persuade the staid Orient Finance company board that mauve was the most appropriate and fashionable colour for their Gold Coast project. He assured them that its height and unique colour would make the ‘Grand Mariner’ a Gold Coast landmark for all time. Soon the office also gained work in New South Wales, as well as in Tahiti, Japan and Singapore.33 The Southport office was generating far more work than head office in Vancouver. Conflict occurred between head office and the Gold Coast. Bill Jackson led the push for a management buyout and so the Hulbert Group Australia became an independent entity. The property boom led Jackson to believe that the opportunities were limitless. The money just appeared to be rolling in. However, as it soon turned out Jackson, Toyota and their staff ‘got caught up in the whole boom thing, the promise of huge sums

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from Japanese clients and all that. We were spending at a greater rate than we were bringing it in — first-class travel all over the place to service jobs, car hires, country club memberships and such. Borrowing from banks on the promise of money to come in soon. We just got carried away’.34 Then, in 1990, the recession hit. Many Japanese projects on the Gold Coast were put on hold. Also, at the time ‘we were doing a lot of stuff in Japan and around Asia, none of which got built because [in 1990] it was in its early stages. But Bill would not cut back and scale down. It was an ego thing with him,’ said Brian Toyota. The debts had piled up and suddenly the payments from most clients ceased. The financial juggling became progressively more frenzied. On 10 July 1991, the Australian Taxation Department launched a winding-up application against the Hulbert Group Australia for unpaid taxes of $478,870, and a week later the staff were locked out of their Southport office by the landlord, who was owed substantial rent monies. Brian Toyota lost money in the Hulbert Group Australia collapse but was engaged by another Gold Coast architectural firm. And Bill Jackson? According to Brian Toyota: ‘He did a Christopher Skase … He went back to Canada. I mean he didn’t take any money with him, but he’s not going to come back here because of outstanding debts and that.’ These architects, designers, estate agents, consultants and planners were the people who thrived as the deep pockets of the Japanese investors gave them opportunities to show their skills and enjoy financial rewards that a few years earlier would not have seemed possible. Some encouraged investors to fix their gaze on and then purchase a specific site or property, and others used their professional skills to smooth the path of business negotiations. A final group were instrumental in translating the general idea of a project into a specific plan of development, a plan that gave the investor a hotel, resort or high-rise apartment block which reflected status and wealth while advertising the avant-garde stylishness of its design creator. In this way the Gold Coast that Japanese money had created developed features that changed it for all time.

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Footnotes 1

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6 7 8 9 10

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Peter Lacey, Foreign Property Specialist, Richard Ellis, Property Consultants. Personal communication, 13 April 1994. It featured in the writings of Ray Pahl and is often referred to as the ‘managerialist’ approach to the study of urban communities. (R. E. Pahl, Whose City?, Penguin Books, Harmondsworth, 1975.) The Japanese-language press in Australia encouraged its readers when contemplating buying property to consult an estate agent. For example, Nichigo Press (10 September 1992), wrote (in translation) ‘Even though you want to buy, you don’t know who you should approach. Don’t worry. If you walk down any busy Surfers Paradise street you’ll find a lot of colourful advertisements in the real estate agent’s window. Go in and ask for advice.’ Geoff Burchill, written communication 23 March 1994, and personal communication 18 July 1994. For example the Japan Transport Cooperation Forum held in Tokyo in 1991. The title of Geoff Burchill’s paper presented at that forum was ‘Major Tourism Developments in Australia’. Alexander McRobbie, personal communication, 23 September 1992. The Weekend Australian, 25–26 March 1989. Max Christmas, personal communication, 11 April 1994. Max Christmas, The Leading Force, 1992. B. Ishizaki, ‘Overseas Investment in Australian Property’, Paper presented at B.O.M.A. National Congress, Sydney, 13–16 September 1987. Ms Leanne St George, quoted in The Australian, 31 August 1988. Such large Gold Coast property agencies as PRD Realty, Richard Ellis, Raine & Horne, Ray White, Jones Lang Wootton, and Baileau Kight Frank, all sent representatives to Japan on a regular basis. Dan McVay, Joint Managing Director, Richard Ellis, International Property Consultants. Personal communication, 21 October 1994. Etsuko Bishop, PRD Realty. Personal communication, 19 October 1994. Jones Lang Wootton and Raine & Horne also established similar positions to better service their Japanese clients. Between 1987 and 1992 Daikyo Kanko Corporation had a subsidiary ‘Daikyo Real Estate’ whose two offices on the Gold Coast employed both Australian and Japanese sale staff. John Franklyn, President, Real Estate Institute of Western Australia, ‘How to bond with Asian buyers’, The Australian, 4 March 1995. Peter Lacey, Foreign Property Specialist, Richard Ellis, Property Consultants. Personal communication, 13 April 1994. As Bill Morris, Managing Director of Prodap Services commented, ‘They seemed to just pay the figure that was asked’. Personal communication, 11 April 1994.

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‘Japanese warned on Aussie rip-offs’ read one headline in the Gold Coast Bulletin (6 September 1989); the claim that ‘some Japanese have been ripped-off’ was also made by a property industry source on the Gold Coast who did not wish to be named, in The Weekend Australian, 13–14 January 1990. There was also a protracted court case in which a Japanese investor sued a Gold Coast estate agent for misrepresentation over the purchase of land for which he claimed to have been grossly overcharged (Gold Coast Bulletin, 9, 16 and 17 July 1991, and 23 July 1992). Paul Murphy, Director, Herron Todd White, Valuer. Personal communication, 14 April 1994. Kotaro Matsuda, solicitor with Feez Ruthning, Brisbane. Telephone interview, 25 November 1994. Grayson Perry, Chief Research Manager, Regional Development Committee Gold Coast & Albert Shire. Personal communication, 12 April 1994. Kotaro Matsuda, interview 20 October 1994 and telephone discussion, 25 November 1994. The most profound and amusing instance of such ignorance was related by the press and involved the concept of crown land and its leasehold. Apparently a potential buyer from Japan lost interest in an island property off the Queensland coast because on reading the small print of the legal documents he found that it was ‘crown land’ to be given as a long-term lease. He could not fathom the concept of ‘crown land’ at all. ‘You mean it is really owned by some lady in England?’ he is reputed to have said (The Australian, 11 May 1991). Kotaro Matsuda said that until 1989 there was no practising Japanese lawyer in southeast Queensland. In that year he became the only such person who practised in Brisbane and the Gold Coast. There were also five in Sydney and one in Canberra. By 1995 there were three more Japanese lawyers working in Australia: two in Brisbane/Gold Coast and one in Cairns. Zin Sawachika, Japan Management Corporation. Personal communication, 19 October 1994. ‘Architect keeps an eye on the world’, Courier-Mail, 26 July 1991. One such pair of arrivals were the designer and architect Yuki and Liza Kato. They arrived in 1988 and by 1991 Yuki was an associate at Noel Robinson Architects, (Courier-Mail, 22 March 1991 and 11 October 1991). Desmond Brooks, Managing Director, DBI Design Corporation. Personal communication, 28 June 1995. His sense that architecture should be ‘fun’ reached its apogee when he made a palm fringed South Seas lagoon the centrepiece of the Southbank redevelopment in central Brisbane.

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Des Brooks also designed large residences for four wealthy Japanese who had decided to settle on the Gold Coast or wanted a second home there. ‘Hulbert faces wind-up’, Courier-Mail, 19 July 1991; ‘Cove architect the Hulbert Group folds’, Gold Coast Bulletin, 19 July 1991. Brian Toyota, Director, McKerrell Lynch, Architects (until July 1991 Partner, Hulbert Group). Personal communication, 4 July 1995. Dan Seymour from Vancouver, Bill Collins from Hawai’i, and Michael Bedner from San Diego. Their major commission was the Caves Beach resort development south of Newcastle, New South Wales. But after the onset of the recession, its owner Gordon Pacific collapsed and was delisted by the stock exchange, (‘Prime Space’, Supplement of The Australian, 28 August 2003). The last straw evidently was the high cost of rental for an office Hulbert Australia leased in the Rocks area of Sydney. Hulbert Australia had locked itself into a three-year lease, engaged staff and spent on long-term car hires, ‘on the basis of cash flows we had during the boom’.

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Chapter 6

The Gold Coast of the Japanese: postmodern glitz, packaged landscapes and the Beirut look

WE ARE NOW at the end of the 1980s. An aeroplane full of passengers from Sydney flies northwards, it follows the New South Wales coast until it reaches the mouth of the Tweed River. There, ahead of them, the Gold Coast suddenly appears. This long ribbon of a city stretches for about 50 kilometres northwards along the shores of the Pacific Ocean. Most of it seems to lie along a series of sandy coastal crescents separated by bush-covered headlands from which the odd resort and high-rise building protrudes. In the distance, the urban ribbon wells up into the pencil towers of Surfers Paradise and beyond. The aeroplane now veers over a headland and starts to descend towards the runway of Coolangatta airport. The visitors may be puzzled by the sight of the words ‘Jesus Lives!’ embedded into the flat roof of a large house directly under the flightpath, but, as the

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aircraft continues to descend, it is a large X-shaped building at the centre of a cluster of others grouped around it that seems to rear up towards the descending machine. It looks as if the buildings have just been completed, but they are all largely empty. This was to be the Gold Coast’s Clinic of Excellence. It served as the first example sighted of what the wave of Japanese money that surged into the Gold Coast had helped to create. All cities have been created by cycles of capital investment. Each cycle is conducted by its own group of entrepreneurs. Each works with the given technologies, economic priorities and cultural values to produce buildings and projects that say something about the period in which the investment occurred. This is not just a process of creation, it is also one of destructio, for each wave of investment knocks down some of what was built before to replace it with what it wants to create.1 So, on the Gold Coast, the 1958–60 wave of investment saw the disappearance of many fibro weekend shacks and their replacement by motels and walk-up holiday flats, which in 1971–73 and 1979–81 often made way for the first and second wave of high-rise apartments. Now, at the end of the 80s, there had just been another boom, another wave of investment. This one cannot be grasped without a glimpse of what its largest component, the flow of money from Japan, did to the Gold Coast.

The changing image of the Gold Coast What follows is a series of perspectives on what this Japanese money had done and was doing to change the Gold Coast landscape. A kind of kaleidoscopic impression of a city in the throes of re-creating itself according to social and cultural norms of the time and the wishes and priorities of a new group of people in its midst, people who arrived so suddenly that their presence was seen as both dramatically obvious yet inexplicably mysterious. People usually have very simple, clichéd images of cities which they have not visited. Paris is the Eiffel Tower, Sydney is the Harbour Bridge and Opera House, and the Gold Coast? It is inevitably the high-rise skyline of Surfers Paradise, a skyline once described by the architectural writer Norman Day, as a ‘mish-mash of tall towers and “bomboniere” buildings’.2 However, Surfers Paradise is what gives the Gold Coast its image; that is what the advertisements produced by the tourist promotion industry highlight. It was with such an image uppermost in their mind that the Japanese arrived there. Surfers Paradise was what they thought

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they knew a little bit about and so that is where they wanted to be. This made Surfers Paradise the funnel through which the flow of Japanese tourists and investors occurred.3 This in turn had the effect that shops, cafes, restaurants and estate agencies in central Surfers Paradise were the ones who catered most obviously to the Japanese who passed by their windows. Orchid and Elkhorn Avenues and diverse shopping arcades around them saw the opening of designer label boutiques to entice the big-spending Japanese visitor. Many long-established shops selling souvenir badges, T-shirts, towels and thongs to the Melbourne and Sydney tourist had disappeared. The new fitout of their retail spaces was often revealed to be for Louis Vuitton, Cartier, Hermes, Dunhill, Bally, Hunting World and Ken Done. Many shops, especially those selling Australiana items or offering duty-free goods, had signs in Japanese, at times more prominently placed than the pre-existing English ones.4 If this weren’t enough, some shops had fashionably dressed young Japanese — no doubt on a surfing/working holiday in Australia — standing outside the entrance touting for business. As a person who looked like a Japanese tourist approached, the touter would talk and gesture in that polite, self-effacing Japanese manner to try and coax his or her fellow national into the shop. Arcades and shopping plazas became favoured gathering places for these tourists. The Raptis Plaza was one of these. The Japanese-owned Raptis Plaza on Cavill Avenue was an example of those delicious postmodern creations found at their best in an international holiday resort. Under the barrel arches and glass domes of its ceiling was the focal point of the centre, the international food court. There in its middle stood a marble replica of the statue of Michelangelo’s David. Quite frequently, groups of

Japaness signage in the window of a Surfers Paradise real estate agency. Source: J. Hajdu

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Japanese visitors could be seen eating their sushi or licking an ice cream under its serene gaze. Little did they know how fiercely the ‘with or without fig leaf’ controversy raged after David was unveiled in 1988. Now, a couple of years later, they were — as hard-working tourists — most likely too tired to look up to see that the ‘without’ faction had won the battle. What incongruous juxtapositions of people, tradition, imagery and styles all this produced, but then the postmodern is about such incongruities. The Lido Arcade between Orchid Avenue and the Gold Coast Highway had developed a character all its own. Tucked away between these two thoroughfares so that a less observant stroller could easily have missed it, this alleyway became a ‘little Japan plus’. The ‘plus’ being the Kimchee House Restaurant with its map of Korea as a feature wall. The Japanese presence was seen in a number of small shops and foodstalls tucked into the side of the walkway and, most prominently, in the presence of a large noticeboard. This pinboard seemed to be the nerve centre of the lives of the young Japanese who stayed on the Gold Coast for varying lengths of time. The notices, some in Japanese, others in English and some in amusing mixtures of the two, said it all: ‘Yamaha 535cc For Sale’, ‘Wanted Japanese flat mate. No noisy bands’, ‘Tenisu Ressons given’ and ‘Day Tours and Weddings arranged’. The Wakamusha (Young Samurai) Restaurant was one of half a dozen or so Japanese restaurants that had sprung up in the Surfers area of the Gold Coast by the late 1980s. This one was run by authentic Japanese staff, while some of the other Japanese restaurants were a case of Chinese-Australians wanting to appear to be Japanese. The simple austerity of its interior and the watercolour prints of geishas on its walls made the Wakamusha Restaurant everyone’s idea of a Japanese eating place. Whether the Japanese visitors really wanted to flock to restaurants serving their familiar cuisine, or whether they wanted to have the Australian culinary experience was a hotly debated topic in the Gold Coast tourist industry. Whatever the case, more and more Japanese restaurants were appearing and catering to a wide range of visitors from Japan and everywhere else. The windows of the Surfers Paradise real estate agencies were pinned full with details of Gold Coast properties for sale. Apart from the usual photograph of the house or apartment, there were inevitably the details of size, location and price — now given in both

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English and Japanese. There were sometimes racks outside the door with Japanese only leaflets in them, not to mention the special billboards set up on the pavement with further information in Japanese. Some real estate agents had also employed Japanese speakers to help smooth the path of the property purchase negotiations.5 Nothing appeared to be too much for such wellheeled, enthusiastic buyers. The impact of the Japanese Gold Coast property buying spree became obvious as one moved north of Elkhorn Avenue. On the corner of Elkhorn Avenue and the Gold Coast Highway, smartly dressed Japanese tourists could often be seen coming out of the Matsushita Corporationowned ANA Hotel or the chic Galleria shopping plaza at its base. However, when one walked past the hotel the scene changed dramatically: for three blocks there was nothing except a few relict buildings, the wasteland of carparks, empty building sites and a few transient businesses in what appeared to be temporary premises. The sleek, opulent, five-star Gold Coast International Hotel stood starkly in the distance. These sites had all been filled with 1960s walk-up flats, small motels, service businesses, and some high-rise buildings of the early 1970s. In the 1980s, Gold Coast developers, financiers and property agents had bought many small properties in the area, consolidated them into substantial development sites and then offered them to Japanese buyers. They in turn wanted them cleared of all dwellings before the contract of sale was finalised. Now, much of northern Surfers Paradise was suspended in this commercial and visual limbo between the destruction of the old urban fabric and the building of the new. It was estimated that about 3,000 home units were demolished in this process of preparing sites for sale to Japanese investors.6 As the delay in the start of building the Japanese-funded

Young Japanese waiting to tout for business outside an Orchid Road duty-free shop. Source: J. Hajdu

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projects lengthened from months to years, local wits spoke of Surfers Paradise having got ‘the Beirut look’.7 The sheer extent of Japanese purchases in Surfers Paradise is summed up by two statistics: the city centre of the Gold Coast consists of 36 city blocks, each bounded by specific streets; by the end of 1990, Japanese investors owned all the properties in seven of these blocks, and held some of the property titles in 14 others.8 Generally speaking, land in the centre of any city is the most expensive, and the Gold Coast was no exception. This gives some sense of the magnitude of the Japanese presence in Surfers Paradise. Looking northwards over Surfers Paradise from Elkhorn Avenue, one saw a jigsaw puzzle of buildings with the empty sites looking like numerous large missing pieces. The differing sizes and shapes of the empty development sites all told their stories. On the beach side of the ANA Hotel was an L-shaped empty piece of land wrapped around a 1960s walk-up block of flats whose owner wouldn’t sell. This was to be filled by a 35 storey block of shops and apartments funded by its Japanese owner, the Pacific Atlas company. Within a stone’s throw to its north was another Lshaped site, this time enveloping three 1960–70s buildings, and owned by Kyowa Wing Australia. Here the plans were for a 35 storey hotel/retail complex. Diagonally northwards was a whole city block bare except for some cars parked on it. Originally Australianowned but now in the hands of Daikyo Kanko Corporation, intentions for the site were unknown. Cross the street and there is another complete city block, overgrown with tussock grass and with a few forlorn trees along its street frontage. This was the Koshin site with plans for a 543 room resort hotel. Then, standing in proud isolation, was Daikyo Kanko Corporation’s Gold Coast International Hotel, behind which was another piece of vacant land over a hectare in size and again covering a whole city block. This was owned by a group (Warcore and Cedric) associated with the large Japanese Hinoki Real Estate company. The plans for this site? Well, inevitably a 37 level, $200 million resort hotel. The list of Japanese sites could go on, Big Arrow Enterprises, two more Daikyo Kanko Corporation sites, not to mention the H-shaped Jimna site a few blocks further south on Cavill Avenue. As the Gold Coast entered the final decade of the twentieth century the plans for all these sites were grand, even if somewhat repetitive, but within a couple of years it would become clear that

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very few of these plans would ever be realised. The only people to earn money through their association with these development sites would be the Gold Coast estate agents commissioned to resell them.9

The elite neighbourhoods and the invisible Japanese presence If Surfers Paradise was the funnel through which Japanese capital flowed into the Gold Coast, it was also from there that it flowed out into the adjacent luxurious residential areas. Chevron Island, Isle of Capri and Cronin Island in the Nerang River immediately to the west of Surfers had from their initial development in 1959–61 been the exclusive addresses of the most well-to-do. Large mansions were the norm there, with very little tourist accommodation and high-rise development being visible to upset the lifestyle of the residents. However, if a well-paying Japanese buyer appeared then many were prepared to sell. So, between 1985 and 1989, there was a significant trickle of properties that passed into Japanese ownership. The most publicised of these was Shuji Yokoyama’s purchase in 1988 of three houses on Cronin Island, which he demolished to build his ‘ultimate’ $8 million mansion.10 But, what the Japanese house buyer particularly liked were the houses with canal frontages. Being able to tie up one’s boat at the bottom of the garden was something a person in Japan only saw on American television. In fact, actually owning a private boat in Japan was a very rare occurrence. So, for a Japanese, the possibility of enjoying such a lifestyle on the Gold Coast was like walking into a dream, and the place where some of them entered that dream was Paradise Waters. Developed near the mouth of the Nerang River immediately north of Surfers Paradise, Paradise Waters was a 354 allotment estate. From the air it looks rather like the tentacular vein system

Copy of Michelangel’s David in the Raptis Plaza shopping mall in Surfers Paradise. Source: J. Hajdu

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of a leaf that has been flattened between the pages of a book. The narrow slivers of land each with a street along its spine are neatly interleaved with tongues of Nerang River water. The result is a surprisingly geometric-looking creation of modern engineering. The houses back onto the streets with their frontages facing the canal. The size and facilities of the homes can only be called ‘palatial’. Paradise Waters was among the first addresses on the Gold Coast to record property prices above $1 million. Commodore Drive and Admirality Drive are the ‘best of the best’ addresses, and, whenever one of their properties was advertised for sale, the real estate industry’s phrases become particularly detailed and effusive — ‘Paradise Waters’ incomparable luxury’, ‘majestic Mediterranean style residence’, ‘glorious river views’, ‘deep water jetty’, ‘a large contemporary mansion with a private helipad’, ‘vast areas of natural terracotta paving for outdoor terraces’, ‘4 bedrooms, 4 bathrooms’, ‘2 powder rooms and spa pool room’, ‘enormous games room of approx. 13 squares’, ‘wine cellar and gymnasium’, ‘lavish use of imported marbles and granites’, ‘gold fittings to ensuites and powder rooms, lacquer finished doors and cabinet work’, etc., etc.11 Paradise Waters was one of the closest neighbourhoods to Surfers Paradise in which large houses with canal frontages could be purchased. Hence, from 1985 to 1987, during the first couple of years of high Japanese investment on the Gold Coast, they flocked to buy homes in Paradise Waters. By the end of 1987 property writers estimated that about 60 of the 354 homes were in Japanese ownership.12 Most of them were bought by affluent private individuals, but other houses were bought by Japanese companies to entertain their guests. The Maruko Corporation bought 90 Admiralty Drive as a base while they were building and marketing the Rivage Royale on the opposite bank of the Nerang River. Harunori Takahashi of EIE, however, bought a property on Paradise Waters, in some ways like a skirmish to the main competitive battle he then fought to purchase Sanctuary Cove. After Canberra tightened restrictions on foreign purchases of existing homes on 29 September 1987 (see Chapter 8 for more details), there appeared to be a slowing down of sales to Japanese buyers. However, local observers claimed that the famous Gold Coast entrepreneurial spirit had found a way of keeping the yen flowing: some developers were buying and bulldozing homes to sell the vacant blocks to Japanese at a profit.13 The Japanese buyer

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could then have a new house built without the foreign investment restrictions imposed on non-Australians buying existing homes. People who lived in Paradise Waters commented that most of the houses bought by people from Japan appeared to be empty for most of the time. They were used as second homes, or holiday homes for a week or so a couple of times year. The Aussie residents next door were puzzled by such increasingly numerous ‘silent neighbours’. Such creative destruction of bricks and mortar was not limited to the Paradise Waters area of the Gold Coast. Main Beach, just to the north of Surfers, underwent a much greater metamorphosis. This had been a suburb of seaside cottages, retirement residences and some duplex townhouses, with a few modernist high-rises overlooking the beach and Broadwater. The 1980s boom changed all this. Some home owners were made offers ‘too good to refuse’. This then started the process of neighbourhood change, which led to other home owners becoming powerless to prevent their houses being overshadowed by the new high-rise apartments next to them. When made an offer by a developer, they sold quickly. The presence of Japanese capital facilitated this process. Those Japanese investors who did not want a house in a canal estate increasingly bought into the new high-rises that shot up in Main Beach like mushrooms.14 The names of these edifices in the

An empty site waiting for development. Part of the ‘Beirut look’ of northern Surfers Paradise. Source: J. Hajdu

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sky were chosen to be a marketing tool. They had to have the whiff of class, exclusivity, cosmopolitanism and leisure about them. Hence there was ‘Park Lane’, ‘Contessa’, ‘Pintari’, ‘Malibu’, not to forget the ultimate in magical fantasy — ‘Zanadu’. Not only did individual Japanese buy units in these new projects, their large investors financed some luxury high-rise developments themselves. The large trading conglomerate C. Itoh went into partnership with Australian interests to fund ‘Silverpoint’. They bought a site at the southern edge of Main Beach, which had a commanding view of the ocean, the Surfers Paradise skyline and the Nerang River. There, looking rather like a huge CD-rack, rose their 31 storey apartment block. As far as the Japanese were concerned luxury equalled space, space and more space. The smallest apartment was 220 square metres (24 squares). There were never more than two apartments on each level, and above level 24 there was only one of 520 square metres per floor. The culmination was, as the advertisement put it, ‘an indulgent double level 929 square metres penthouse’. Perhaps two football teams could have considered it as the site for their next match? Compared with the size of the Silverpoint penthouse, that in Daiwa House’s ‘The Inlet’ was relatively modest. Here the buyer had to make do with a home of only 637 square metres, but The Inlet had two penthouses, rose to 35 storeys above the streets of Main Beach, and the residents were guaranteed equally spectacular views. In this way the competitive quest for prestige among the Japanese companies could be assuaged. Furthermore, the silhouette of The Inlet against the afternoon sky was as eye catching as could be imagined: it was tall, thin, triangular in shape and its numerous balconies gave it distinctive saw-toothed contours. Five other Japanese companies bought development sites to put their mark on the rapidly rising Main Beach skyline. The competition for the ever larger, ever more lavish projects was on. However, as the economic cycle would have it, only one company actually managed to realise its Main Beach development dream.15 The result was that in the early years of the 1990s parts of Main Beach also had some of that Beirut look. Casting one’s eye north of Main Beach along the Broadwater and Spit, the icons of the Japanese financial presence continued to shimmer near the water. On the Spit, the white sails of the roof of Mitsui-Nippon Shinpan’s Marina Mirage shopping centre drew

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attention to the most luxurious array of boutiques and cafes on the Gold Coast. The sails were also the advertising logo of the resort/hotel discreetly hidden by the tea trees near the beach behind it. Further along the Spit, the paraphernalia of the big dipper, scenic rides, aquatic entertainment venues, and lowrise ribbons of the Sea World Nara Resort came into view. Meanwhile, on the opposite shores of the Broadwater in Southport, the pyramidal shape of the building that was the Tobishima Corporation’s Australia Fair shopping centre caught the eye. A little further south, where the Nerang River flows into the Broadwater, the rear view of the curvilinear shape of the Rivage Royale apartment building dominated the skyline. Chizuko Nakandakari certainly had a high-profile property to market. But now an intriguing spectacle became visible on the Broadwater near the Marina Mirage: a mock gothic chapel on a pontoon that seemed to be moving on the water. On closer inspection there were a bride and groom on board who looked Japanese. They were being ushered into the chapel by a priest. Later the couple reappeared, the priest and an attendant shook their hands, and then a helicopter picked them up and flew them high above the Broadwater and across the Spit for a photo opportunity among the sand dunes of the nearby Pacific Ocean.16 The priest who officiated at the ceremony turned out to be an ex-French Foreign Legionnaire who had found God and settled on the Gold Coast. The floating chapel on the Broadwater was only the most colourful variation of the Japanese wedding packages being

Royal Pines Resort at Ashmore with the Prince Hotel in the centre. Source: MID Australia Pty Ltd

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offered by local companies. One such company called ‘Australian Wedding Blessings Ltd’ in the early 90s sold over one thousand wedding packages to Japanese couples every year.17 If the Japanese, in their quest for homes or development opportunities, were venturing northwards beyond Surfers Paradise, then a similar dispersal southwards could be noticed. Canal estates like Sorrento, Rio Vista, Florida Gardens and Miami Keys were attracting a steady trickle of Japanese buyers.18 All of these were in the Broadbeach area, an urban district that was developing a sharper image as an increasingly varied shopping and entertainment hub of the Gold Coast. The main trigger for this was the opening of Jupiters Casino complex in 1985. Its gaming tables, hotel, convention centre and floor shows drew many visitors. Shuji Yokoyama of Daikyo Kanko Corporation saw Jupiters’ prestigious nature and economic potential and bought a stake in it (see Chapter 3 for more details). This encouraged other Japanese investors to look at Broadbeach as a favoured investment location. There was also starting to be a dearth of development sites near the beach in Surfers Paradise. This encouraged developers to look southward towards Broadbeach. As was the case in Main Beach, high-rise apartment blocks started springing up there. The visually most eclectic and noticeable of these was the Japanese-funded ‘Belle Maison’. Already its mauve colour caught the eye of the passer-by, added to which came its serrated outline, lookout tower, faux French Renaissance turrets, mansard rooves, and separate guesthouse. The result made the $75 million, 34 level Belle Maison an instant Broadbeach landmark. The Senshukai Company and Nissho Iwai sought to apply chic retailing imagery to an apartment building, so that looking at it would be rather like what one glimpsed when flicking through the glossy pages of their mail-order catalogue back in Japan. ‘They sought to give it [the building] an iconic quality in the Gold Coast skyline,’ said the architect. The 752 square metre penthouse showed this at its playfully postmodern best. As the designing architect put it: ‘Let’s design a two storey house and then put it on top of this thirty-two storey building … so we designed a two storey house with an outdoor pool, a little guest house on the side, you know, that you walk across your yard to get to it. There was also a garden gazebo which sort of topped off one of those vertical elements of the main house … the whole thing wasn’t a French chateau, but it was inspired by one.19

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The full-page advertisements for Belle Maison placed the observer in mid-air looking down on the building with the turrets and mansard rooves of the penthouse thrusting up at you. Imagery and packaging seemed to be everything in the frenzied world of the 1980s property boom. If one moved to the edges of the Gold Coast urban area another feature of the boom was clear to see: the rolled-out instant landscapes of the lavish golf course resorts. The idea of the instant, pre-packaged, rolled-out landscape originated from the American experience of converting stretches of the southern Californian desert and Hawai’ian rainforest into housing estates or resorts for luxury living and recreation. Japanese visiting the United States instantly took to such places as being everything that was prestigious and desirable about the affluent, cosmopolitan lifestyle at the end of the twentieth century. Perhaps they were so receptive to the idea of such pre-packaged landscapes because they were very familiar with them from home. For it has been said that the traditional Japanese garden is really the designed re-creation of a natural landscape, which people pretend is an environment that has evolved in an organic manner without the intervention of human hands.20 The popularity of theme parks in Japan is another manifestation of the ability of people to blur the

Sanctuary Cove with marina, shopping centre and the lagoon of the hotel (right foreground). Source: Discovery Bay Developments Pty Ltd

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distinction between reality and the artefact. So the new golf resort projects on the fringes of the Gold Coast urban area were perhaps less novel for the Japanese than for old Gold Coast residents.21 An observer looking over the mudflats, swamps, sand dunes, relict dairy and sugar cane farms on the edges of the Gold Coast would have seen bulldozers obliterating and re-forming these landscapes with great speed. Landscapes pre-packaged in the offices of architects and landscape designers were being laid out onto the dredged, compacted and elevated surfaces so created. Suddenly there were new hillocks, lakes, lawns and palm trees, followed by roads, and then buildings built according to pre-determined architectural and landscape themes. The environment pretty well changed from being one of barren, flattened sand dunes one day to landscaped streets and golf fairways the next. In the early 1990s, the most advanced of these resorts was Sanctuary Cove, with its nautical-themed village centre, semicircular marina, and 1920s Raffles-style hotel on its specially created hillock. There were the ribbons and clusters of houses, all carefully sited so that each of them would have maximum exposure to either the water or the golf links. The planning of the resort appeared to ensure that golf would dominate life at Sanctuary Cove, and that is what gave this place its special appeal to Japanese buyers. The most frequent mode of travel within Sanctuary Cove was by golf buggy. This was de rigueur, especially if one was travelling to and from one of the two golf courses on the resort. Columns of buggies could be seen moving along some of its private roads and a certain etiquette of buggy travel appeared to have evolved. For example, zooming across a manicured green and scuttling up the embankment to take a short cut to the next road was regarded as ‘not playing by the rules’. During the morning, many buggies also seemed to head for the marine village where residents gathered for breakfast or morning coffee. Life in the gated Sanctuary Cove definitely had the exclusivity that its owner Harunori Takahashi had paid the large sum to get. The other golf course resorts being funded by Japanese investors were variations on the same theme of pre-packaged landscapes placed on the wasteland fringes of the Gold Coast. These golf courses (some free standing others with resorts) were planned for sites all the way from Pimpama, Coomera, Hope Island and Arundel at the northern end of the Gold Coast, to sites at

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Merrimac, Carrara, Robina, Mudgeeraba, and Tulebudgera in the west, and even on the New South Wales side of the border at Cobaki Lakes and Kingscliff. It appeared that the Gold Coast would be ringed by a chain of Japanese-funded golf courses, resorts and golf course residential estates. As it happened, these proposals did not all come to fruition. Only some of the golf resort development plans were converted into bricks and mortar when the credit lines from Japan were cut during the years 1990–92.22 Palm Meadows had its clubhouse, landscaping and some houses; the Nikko Resort had assured sources of funds from its parent company, so was completed on schedule; Royal Pines progressed, but spread over a decade. Others were less fortunate. The Hope Island clubhouse sat alone like an impeccably landscaped oasis in front of its golf course flanked by a vast, flat, empty plain. Koshin Australia’s Sapphire Lakes golf resort at Mudgeeraba was never more than a pile of dirt on which seasonal monsoonal rains set off mudslides. By the spring of 1990, Koshin in Tokyo had ceased sending money, and so Sapphire Lakes was mothballed.23 Arundel Hills, Paradise Springs, Parkwood and such were luckier, they were eventually completed. If we view these golf course resorts not just with our eyes, but also through the prism of the contemporary catch phrase ‘globalisation’, they tell us something quite important. For the first time in its history, the major driving forces of change on the Gold Coast came from not just Melbourne and Sydney but far away Tokyo. Economic conditions, interest rates, bank lending policies, and the decisions of individual business people at the other end of the Pacific basin became crucial to the changing townscape and general well-being of the Gold Coast economy. This was a state of play that had been very profitable to some among the local population and met the general approval of many. But there were other people living in their homes out there in parts of the Gold Coast like Southport, Coomera, Burleigh Heads, Coolangatta and Tweed Heads who felt uneasy about, if not vocally hostile to, what the Gold Coast with the Japanese was becoming. Very soon they decided to spring into action.

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Footnotes 1

2 3

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The thesis that cities are a product of cycles of capitalist investment was developed in some detail by the geographer and social theorist David Harvey. He argued that in their quest for new sources of profit capitalists have to buy existing urban assets and replace them with new buildings, built complexes, etc, so they can maximise their returns. Harvey called this process the ‘creative destruction’ of capitalism. In its most basic form, argued Harvey, the modern city is a product of the past cycles of such destruction and creation (David Harvey, The Urban Experience, Blackwell, Oxford, 1989). ‘Gold Coast: Fool’s gold or modernist dream?’, The Age, 9 May 2002. In the initial phase of individual home purchases by the Japanese on the Gold Coast (1985–7), it was hard to interest them in buying outside the central Surfers Paradise, Main Beach, Broadbeach area. They appeared to be resistant to other areas on the Gold Coast, because in their eyes they did not have the cachet of Surfers Paradise, nor did they have any idea about the environmental characteristics of the rest of the Gold Coast (Gold Coast Bulletin, 29 September 1987; The Australian, 20 June 1990). The rise in community sensitivity about the Japanese presence on the Gold Coast led the Queensland government to urge shopkeepers to tone down their Japanese signage. It was claimed that even some Japanese tourists felt that all the Japanese signage made it harder for them to have the ‘real Australian tourist experience’ they said they wanted (The Australian, 1 September 1994). One such person was Etsuko Bishop who was employed by PRD Realty in Surfers Paradise. She asked to be given the impressive title of ‘Director, International Division’ so that the Japanese customer had the feeling that he was negotiating with a senior member of the PRD hierarchy. Personal communication, 19 October 1994. This was the estimate of Alan Midwood, Rider Hunt Group, Gold Coast. It included the popular holiday apartment blocks of ‘Apollo’ and ‘Sahara Court’, the former was for a brief time in the 1960s the tallest building on the Gold Coast. During the civil war in Lebanon between 1975 and 1990, many districts of the capital city Beirut were completely devastated, hence the media in Australia frequently featured images of that city looking like a huge bomb site. Joseph Hajdu, ‘The Nature of Japanese Investment on the Gold Coast (Australia) during the late 1980s and its Impact on Urban Morphology and Development’, Berliner geographische Studien, A. Steinecke (Hrsg.), Berlin, 1996, Band 44, pp. 463–74. In the early 1990s as most of the Japanese owners of these

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development sites were forced to sell, the Gold Coast estate agencies given the management of these sales ensured that the Gold Coast Bulletin was filled with vivid advertisements and articles with headings, such as, ‘One day very soon all this could be yours’, ‘You’re looking at the most spectacular landmark in Surfers Paradise’, ‘Interest burgeons in central Surfers site’; but the most telling headline was ‘Mortgagee sale by public tender’. Cronin Island was regarded as the most exclusive of these island addresses because there were only 39 properties on it. These descriptive passages were taken from selling advertisements for 107, 111, 125–9 and 147 Commodore Drive, Paradise Waters. Florence Chong, ‘Gold Coast Buoyant despite Keating’, Business Review Weekly, 9 October, 1987, pp. 67–8; eight years later Mick Okawa, President of the Japanese Society of the Gold Coast, said that about 100 homes on Paradise Waters were owned by Japanese, of these only six were permanently inhabited, the rest were second/holiday homes, or used by companies as holiday retreats for their staff and guests. ‘Buyers target Paradise estate’, The Australian, 20 June 1990. The importance of Japanese as purchasers of units in individual highrise blocks varied greatly. The role of estate agents as ‘gatekeepers’ guiding them to the building in which they were marketing units was an important factor in this. The Research Unit of PRD Realty in Surfers Paradise estimated that in 1989–90 about 35 per cent of the high-rise units sold on the Gold Coast were sold to Japanese buyers. After 1990 the recession deepened. This led to a decline in total sales and a decrease in the proportion sold to Japanese nationals to 6–8 per cent. The five companies were: Excellent Life Corporation, Niizeki Constructions, Ocean Resort Development Company, Starts International Group and Yamashin. Only Yamashin actually finished its Main Beach apartment building, in the other cases the company, its creditors or its mortgagee sold the development site before any building had commenced. The novelty of the Gold Coast floating wedding chapel was such that the French-produced TV series ‘Global Village’ featured the story. It was telecast on SBS on 29 November 2002. ‘Japanese couples flock to one-stop wedding shops’, The Weekend Australian, 10–11 April 1993. Financial Review, 1 October 1987. Brian Toyota, Director, McKerrell Lynch, Architects. Personal communication, 4 July 1995. The semiotisist Roland Barthes argued that in Japanese culture, objects such as platters of food, packaging of items, public rituals,

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poetry, gardens, and even landscapes, have different meanings for different people. Such individualised meanings, often different from those of a European or North American, are also frequently ascribed to objects and styles copied from the Western culture. See Roland Barthes, Empire of Signs, Hill and Wang, New York, 1982. Ron Burling, a Gold Coast architect, argued that Australians have traditionally only relied on developers to provide them with a home. Other lifestyle needs they organised individually. Whereas, ‘the Japanese saw a project as a much more all-inclusive amenity-home, sport, shops, restaurants, etc., are all part of it’. Personal communication, 30 June 1995. By the end of 1990 there were 18 golf course/golf resort projects announced by Japanese investors, of these 10 were eventually completed according to their original plans or in a modified form, and eight proposals were scrapped by their proponent companies. Gold Coast Bulletin, 12 November 1990.

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Chapter 7

Yen power stirs national angst

AT 1.40 AM ON 29 November 1980, the sleepy fishing township of Yeppoon on Queensland’s central coast was rocked by a thunderous explosion. A mysterious blast went off at the Iwasaki Capricorn Resort and left a large crater in the foundations of the nearly completed main block. The damage caused was estimated at over $200,000. Evidence showed that the perpetrators of this act of sabotage were motivated by hostility to Japanese property ownership in Australia. At the time, this was seen as an isolated incident. However, as the 1980s continued and the flow of Japanese capital into Queensland turned from a trickle to a flood, its shockwaves reverberated around the state, if not the whole nation. In January 1988, there was another event that occurred on the southern edge of Brisbane. This was the catalyst for a grassroots political explosion that became a national controversy for half a decade and, in various forms, has resurfaced at frequent intervals since then. This event was the sale of the Lone Pine Koala Sanctuary. Kimihito Kamori of Kimihito-Kanko paid $13 million to buy Lone Pine and, ten months later, paid another $750,000 for a 177 hectare bush property at Redbank Plains to give his koalas an assured food supply.1

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The purchase of the Lone Pine Sanctuary by a Japanese investor was seen as more than just the takeover of a beloved Aussie icon, the koala. The name ‘Lone Pine’ struck another chord: Lone Pine, the Nek, Pugge’s Plateau, Hill 60, Baby 700 and Shrapnel Gully were all features of the landscape surrounding Anzac Cove, where Australian soldiers suffered such terrible losses in 1915. The sale of Lone Pine thus conjured up the ghosts of Gallipoli, ghosts that in the minds of many Australians had never been laid to rest. In fact, it was felt by some that the ghosts of Anzac had now reappeared to admonish them for having sold Lone Pine — to, of all people, a Japanese investor. Mutterings of national spinelessness, if not national shame were heard. In early 1988, this only highlighted the growing unease felt by some people on the Gold Coast about the dramatic rise in the amount of real estate falling into Japanese hands. One man who had these misgivings did something about it. His name was Bruce Whiteside. Bruce Whiteside, a taut, wiry man of 54 at the time, with small, dark glistening eyes, was hardly the type of person to be the spearhead of a mass movement. Born in the New Zealand town of Whakatane on the Bay of Plenty, he came to Australia in 1981 and settled on the Gold Coast. He was a house painter and general handyman. Apart from this he had also been the co-owner, with his wife Iris, of the Change Gear Pre-Loved Fashions second-hand clothes shop on the Gold Coast Highway at Mermaid Beach. The Whiteside home in a back street of adjacent Miami is modest and impeccably kept with a garden that bespeaks of much affectionate toil having been lavished on it. All in all, the signs of a pleasant, contented life in the suburban environment of the sunny Gold Coast were apparent. But, in the late 1980s, the world around Bruce Whiteside was changing fast and in ways that unsettled many like him. The Hawke Labor government in Canberra had deregulated the economy and was using the slogan ‘Australia is a part of Asia’ to encapsulate its foreign policy. The sudden flood of Japanese money into the Gold Coast caused some people to fear what this may mean for them. Initially, Bruce Whiteside did not give the sudden Japanese presence in his midst much thought.2 But one day, while painting a window on a house on exclusive Cronin Island, a work mate said, ‘Bruce, come and have a look at this,’ and there on the other side of the street was a man who looked like an estate agent talking to

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a Japanese man who was pointing to one house after the other. ‘I never thought more about it, but some time went by and I heard that the house I had been working on was bulldozed down; and not just that one, but three more as well. And what for? For Yokoyama’s $11 million mansion. This was just at the time when the biggest agent on the Gold Coast was boasting of having sold the Holiday Inn to National Panasonic. This was capped by the Lone Pine sensation. Lone Pine … meaning Gallipoli! Bells started ringing.’ Bruce Whiteside came from a family that was very aware of the meaning of Gallipoli. He had lost two uncles in that heroic tragedy.3 The sale of Lone Pine Sanctuary to a Japanese company started Whiteside on a train of thought about what to him was the basic issue: the ownership of land in Australia. Land that he saw as the birthright of all young Australians (‘here we are talking about heritage, we’re talking about birthright’). Selling land to ‘foreign interests’, and though unsaid by him, selling it especially to the Japanese, he regarded as a ‘betrayal’ of everything that the ANZACS and other Australians in World War II in the Pacific had fought for. His musings quickly resulted in action. Over the next few weeks he wrote four letters to the Gold Coast Bulletin. In the fourth of

Bruce Whiteside leading a protest march through the centre of Surfers Paradise against ownership of land by foreigners. Source: Courtesy Courier-Mail.

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these Letters to the Editor he called on other readers who felt similarly concerned about foreign land purchases on the Gold Coast to contact him. Over the weekend of 7–8 May 1988 that followed, Whiteside received 159 phone calls of support.4 This encouraged him to call a public meeting on 24 May 1988. He hired the school hall nearest to his home. It seated 1,200, ‘Geez, what if we only get forty or fifty people turning up?’ he mused. However, much to everyone’s — including Whiteside’s — surprise, that first meeting at the Miami School Hall attracted 1,500 people. It filled the hall to overflowing and made the headlines of next day’s Gold Coast Bulletin. Among those present was Tsuneo Sugishita, the Sydney correspondent of the mass circulation Yomiuri Shimbun in Tokyo. He described the atmosphere in the hall in the following way: ‘I was seized by the illusion that I was attending an anti-Japanese rally in a country at war with Japan … dissenting voices were drowned out by angry howls … I felt a keen sense of apprehension at the likelihood that anti-Japanese feelings will mount further’.5 Even before the meeting, the calls were coming in to Whiteside from the ABC and the Melbourne Age. Whiteside addressed the meeting and the outcome of his speech was the decision to set up an organization later called Heart of a Nation, with Bruce Whiteside as its chairman. The flyer that was subsequently written did not bother to disguise the fact that behind the ringing cries of ‘the soil is the soul of the nation’, and that ‘the soil of Australia … must be protected by the Constitution … from all foreign ownership’ was the feared Japanese presence on the Gold Coast. After this burst of mass support, the metropolitan TV channels also descended on Whiteside’s home. Jana Wendt and David Carroll of Channel Seven wanted interviews (‘I had six hours sleep in a week’) and the flow of letters to the press on the subject accelerated. The national campaign against Australian property purchases by the Japanese was on the way. The public controversy about Japanese investment continued for about six years.6 The debate raged across Australia as late as 1992, even though by this time a global recession had reduced the attractiveness of Australian property and, at the Japanese end, the ability to buy had been killed by the steep dive of their sharemarket and a severe domestic credit squeeze. The Gold Coast was the epicentre of this national debate. In all, Whiteside and his Heart of a Nation group organised six public

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meetings which were used as catalysts for opposition to each twist and turn of the Japanese property investment saga.7 There were also three public demonstrations in the centre of Surfers Paradise, not to mention the prominence given to the issue in the 1989 Queensland election and the 1990 Federal election. The pages of the Gold Coast Bulletin became the focal point of the local debate. This newspaper splashed the details of every big new Japanese project proposed for the Gold Coast on its front page, while its Postbag page bristled with the views of those who agreed or disagreed with such developments.8 Many federal and state politicians became embroiled in the controversy, as did some prominent business people and academics. Each side in the debate sought to state its case about foreigners buying property in terms of what is good for Australia. The phrase ‘all right-thinking people’ seemed to be used more frequently than necessary. It was used as the ultimate shibboleth that clinched the argument. This gave the whole debate a moral quality, which of course always guarantees a strong delineation of the cases between ‘good’ and ‘evil’. At the most philosophical level the debate became one about Australian identity — Where do our values and culture come from? How do we European Australians perceive this continent of ours? Where are we going as a nation? What is our role in the world as the twentieth century draws to a close? Is the wish to keep anybody out a relevant issue in an increasingly globalised world? In a sense, the whole controversy about the Japanese and their investment in Australia was a national debate about our past versus our likely future. The rest of this chapter describes the various strands of the argument put forward by those opposed to the Japanese presence in Australia. This chapter is also about those people who countered the criticism of allowing the Japanese to bring their investment capital by arguing its national benefits, or who saw the Japanese presence, if not the presence of anybody who wished to bring their assets to Australia, as part of the global Zeitgeist at the end of the twentieth century.

British Australia fears the threat of the almighty yen The suspicion of Asians has a long history in Australians’ awareness of the world, if not in their self-awareness.9 Robert Hughes, the expatriate art critic, gave an insightful view in the following description of his father’s view of the world:

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My father, who was born in 1895, was like every other Australian of his generation when he spoke of Asia. He saw it as a threat — not surprisingly, since Australia had been at war with Japan from 1941 to 1945 and lost many young men in the Pacific islands, in New Guinea, on the Burma Road and in concentration camps like Changi … Such national experiences, mixed with a long tradition of Sinophobia … did not predispose even intelligent Australians like my father towards an appreciation of Zen calligraphy or the finer points of tea … He rarely mentioned Asia to me. He called it the Far East, meaning Near North, and would not have considered going there. Far East of where? East of Eden that is, east of England, a country in which by his death, he had spent less than three of his 56 years, in between tours of duty flying a Sopwith Camel in France for his King and Empire in World War I’.10

The Gold Coast has always been a popular place to retire. From the end of the nineteenth century, a trickle of retirees from Brisbane and the south of Queensland moved to Southport or Coolangatta and settled in cottages near the beach.11 From the 1950s onwards greater affluence, car ownership and looser family ties led to more and more older people from Sydney, Melbourne and country areas of the southern states seeking a warmer climate and moving to the Gold Coast. This has given the Gold Coast community an unusually high proportion of older people.12 Social life away from the tourist strip tends to revolve around the parish church, bowling, croquet and the RSL (Returned Servicemen’s League) club. The attitudes of people like Robert Hughes’ father found a ready echo among Gold Coast residents whose formative years were before 1945. Their suspicion towards Asians, especially their hostility to all things Japanese, reflected this world of British Imperial Australia. Sometimes, their feelings towards the Japanese also came from personal suffering at the hands of the Japanese military during World War II in the Pacific.13 Thus Canberra’s frequently articulated slogan of the 1980s ‘Australia is a part of Asia’ was met with incomprehension, fear and strong denials by those critical of the growing presence of the Japanese on the Gold Coast. They saw Australia as a unique land to which its present inhabitants have an inalienable right. ‘We are not part of anybody’s empire. We are an island continent, wealthy in our own right. We must fight for our right to remain so’.14 Whiteside put it similarly when saying that, ‘This land is sacrosanct

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to Australians. It doesn’t belong to the Japanese. It doesn’t belong to the New Zealanders. It doesn’t belong to the Indians. It belongs to the Australians.’ This belief in what might be called a symbiotic relationship between Australians and their continent was echoed by the plea from an environmentalist, living in the mountains behind Murwillumbah in northern New South Wales, not to sell our land, so that there would be ‘a residential place for everyone, and a chance for our grandkids to experience the joy of the dinkum Aussie bush’.15 For, ‘if we don’t draw the line in the sand [our] children might be living in central Australia while our coastline has been sold off to foreign landowners’.16 As the debate continued, such declarations of love for Australia reached their most eloquent in the rendering of an adapted version of a poem that has become a national icon: ‘My Country’ by Dorothea MacKellar: I loved a sunburnt country, A land of sweeping plains, Before the pollies sold it To all the Asians. I loved her far horizons I loved her jewelled sea, Alas, my kids won’t see it — A yellow land to be.17 The use of the past tense shows that the writer’s affection is for a country that he feels is vanishing fast. It is being sold by its rulers to those whom people like the writer have always feared would come and take it: the Asians. What is revealing is the line of thinking that lurks behind this ditty: either we have Australia, or others will have it; no evolution or compromise of any sort is possible. Such a possessive sense of territoriality is part of the Australian myth or legend. Historians, philosophers and literary figures have argued on a number of occasions that ‘the essence of the Australian legend is the struggle of man [read European man] with the land … [and] … the importance of the legend is that the Australian [white man] has [therefore] earned the right to possess the land’.18 At the same time, this need to keep reasserting this claim seems to imply that there is something else hidden behind it. Could it be fear? Fear that the European claim to the continent is insecure, is fragile? In the 1930s, Nettie Palmer touched on this sore point quite explicitly.

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She wrote: ‘Three or four generations have not been enough to allow us to get throughly rooted in the soil. Waves of uncertainty sweep over us. Is this continent really our home, or are we just migrants from another civilization?’19 It is possible to argue that such fears coloured the trauma felt by Australians after 1941 as the Japanese soldiers swept south towards the continent. Victory against the Japanese did come in 1945, and within a decade the troubled relationship between the two countries began to change: from being the object of racial hatred Japan became Australia’s most valuable trading partner.20 Many Australians who had vivid memories of the War could not absorb and psychologically process such a climactic change. So, when the Japanese reappeared as property buyers on the Gold Coast four decades later, the psychological nerve ends of older Australians were still exposed. The politics of memory took over and the predisposition to treat all Japanese as military enemy determined their mind-set.21 A sense of ‘letting the enemy into our castle’, of ‘surrendering this great country’ to an implacable enemy, defined their response. The response of John Cumming, an advertising man, shows this clearly. John Cumming was born in 1921. He came from a Victorian pastoralist/merchant family that could trace its ancestry in Australia back to the mid-nineteenth century. He saw war service in the South Pacific, and, in an autobiography he wrote in 1993 called Lucky be Damned, he credits his wartime experiences as one of the most important influences that moulded his character.22 After the War, he worked in the advertising industry, eventually setting up his own agency. The gradual takeover of much of the Australian advertising industry by American agencies made him sensitive to the issue of foreign investment in Australia. In 1977 he was one of the founding members of the Australian Democrats and pushed for their adoption of a more restrictive foreign investment policy than either the Liberals or the ALP in government had practised. In 1990, he established Austand, to help ‘Win Australia Back’. In other words, to press for the buy-back of Australian assets that had passed into foreign hands. He moved to the Sunshine Coast just as the anti-Japanese investment debate started to heat up. It is the tone and terminology of his case that is revealing. Cumming was no ardent socialist. He argued his case very much in terms of private enterprise economics, but at the same time he made a link between ownership of an asset and ‘control’, ‘national

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power’ and ‘Australian independence’. In other words, the things he had helped to fight for against the Japanese between 1941 and 1945 were the same as what had been happening to Australia in the decades that followed. Only this time the power that was threatening Australian nationhood was not military but economic. His book details a visit to Japan in 1955. There he went to the Foreign Press Club in Tokyo and it was what a number of (unnamed) US journalists told him that became indelibly imprinted in his mind. They told him that the Japanese had a longterm plan. This plan would see Japan re-emerge as a world superpower, only this time the tactics used to achieve this would be economic.23 This made him feel that ‘all the effort that had gone into defending the place [that is, Australia] had been a waste of time’.24 To someone, a part of whose formative years were spent fighting the military might of Japan, this explanation for what Japanese individuals and companies were doing in the 1980s around the Pacific could sound highly plausible. The belief that the Japanese investors on the Gold Coast were bent on territorial conquest by financial means was echoed quite often on the Postbag page of the Gold Coast Bulletin. Phrases such as, they want to ‘Blitzkrieg us with money’, ‘they are bombing their way into huge investment wealth’ and ‘peaceful takeover of our country’ were the types of comments contained in letters published by the newspaper.25 It is interesting to deduce what this imagery appears to say about Japan. Japan is seen as a monolithic juggernaut that wants power and control of Australia. Because Australia is such a desirable place to possess they mounted a concerted campaign to conquer it half a century earlier, and they saw their military defeat in 1945 as only a momentary setback in this campaign. Now, in the 1980s, they were back with the same aim but with a different weapon. The Heart of a Nation manifesto written by Bruce Whiteside and his fellow members issued the ringing cry that, ‘When this soil on which we stand was under threat from invading forces, the demarcation lines of war were clearly defined. Many believe that in a more subtle way we are again facing a threat of invasion.’26 Thus, the time was again seen to have come to stand and be counted in defence of Australia. The RSL entered the fray. The president of its Victorian branch, Bruce Ruxton, warned all Japanese in Australia to stay clear of RSL clubs. However, much to his credit, the

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national president Sir William Keys took a more moderate line. He warned that, ‘though we cannot forget the atrocities of wartime, but equally we cannot close our minds to the challenge of the future.’27 Others, such as the Australian war heroine Nancy Wake, were invited to the Gold Coast to express their opinion on the new ‘Japanese threat’. The next day the local press featured her comments with the headline, ‘War heroine blasts “attack” by the yen’.28 A noteworthy feature of this controversy was the extent to which the opponents of the Japanese investors on the Gold Coast and its supporters sought to give their case greater weight, legitimacy and moral fervour by inviting outside public figures to join the Gold Coast debate. Such outsiders were seen to have expertise and status to add weight and reveal new dimensions to the verbal drama that was unfolding. The Nancy Wake speech on the Gold Coast was one manifestation of this, but there were others. For example, the visit of Daniel Burstein from New York. As the increasing financial muscle of the Japanese in the United States was also becoming a hot topic especially in Hawai’i, California and New York, a series of books appeared dealing with this ‘Japanese threat’. A writer of one such book was the New York Times journalist Daniel Burstein. His book appeared in 1988 under the title, Yen! The Threat of Japan’s Financial Empire.29 He visited the Gold Coast to publicise the appearance of the Australian edition of his book and read extracts from it in public forums. Its tone and imagery was music to the ears of the local critics of Japanese investment. Burstein called his book ‘a report from the front lines of a war that has not yet been declared’.30 He argued that short-sighted economic policies, the lack of support for industry, and the overly individualistic culture in the United States were giving Japan the financial upper hand.31 He saw Japan as a culture based on consensus and the main topic on which they had a consensus was the quest for national greatness. Ultimately this would tilt the balance of power between the United States and Japan in the latter’s favour. Burstein coined the phrase ‘Pax Nipponica’ to label the likely scenario for the world pattern of power in the twenty-first century.32 Whiteside and his supporters could not but agree wholeheartedly. Finally, the participation of Professor Geoffrey Blainey, a Melbourne historian and, since the mid-1980s, very much a

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public intellectual, was used to add legitimacy and force to the anti-Japanese argument. Even before the political debate about Japanese investment had erupted on the Gold Coast in 1987, Blainey had already made himself controversial by questioning the vision of Australia that the Hawke government had spelt out. Through a series of public speeches, radio and television appearances Blainey questioned the whole validity of the ‘Australia as part of Asia’ policy thrust, and most specifically, the level of Asian migration into Australia.33 In April 1988 he was invited to talk on the Gold Coast on this subject.34 On this occasion, Blainey spoke of Australia’s loss of ‘national cohesion’ and said that if present government policies were continued, the Australian nation would fragment into a ‘cluster of tribes’. The arrival of the Japanese and ‘the almighty power’ of their capital was one sign of this danger. What is revealing in the Blainey view of Australia is that it was based on a belief in an Australian national character whose features were formed at decisive stages of the country’s British/European past. In other words, what makes an Australian was already set in cultural and psychological concrete and could not evolve or change in any way. To which those fearful of the Japanese presence on the Gold Coast would no doubt have added: and this has given us the right to defend our national character with all our power. Perhaps we should see such rigid views of Australian culture as a case of some older Anglo-Celtic Australians seeking security and contentment in an idealised past at a time of rapid global change. That it came to a crisis on the Gold Coast is perhaps not surprising.

Headlines in the Gold Coast Bulletin of 27 May 1988. Source: Gold Coast Bulletin

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For it was here that the dynamics of the international tourist and leisure city came into closest contact with the culture of the retirement village milieu, where the ‘New Australia’ of the age of globalisation and Asia–Pacific ties met the ‘Old Australia’ of British Empire verities and World War trauma. This raises the question as to how far the opposition of people from this Old Australia to the Japanese was a reflection of racist values. Those of the New Australia sometimes accused them of racism. Cumming did tend to think in terms of racial classifications.35 Historians and cultural philosophers have noted that people in the first half of the twentieth century often used the words ‘nation’, ‘race’ and ‘culture’ in an interchangeable way.36 These ideas were seen as an all-enclosing envelope that gave people their identity and security. According to this world view Australians felt like Australians because they were culturally and racially different from the Japanese. One group of people defined themselves in terms of their differences from the other group.37 Therefore, the desire to retain your national character was seen as some kind of psychological, if not biological, imperative. As one correspondent to the Gold Coast Bulletin explained ‘By the law of nature, we show a preference to our own family members and form groups based on kinfolk, thus becoming Australians, Japanese, or whatever. To go against nature is not just courting trouble, it is guaranteeing it.’ The idea that human beings possess multiple identities did not occur to people with such views. For everyone belongs to a greater or lesser extent to many groups: to a nuclear family, to a community in which they live, to a cultural group, to a political state, even to a continent. Of course, the extent to which they identify with all or some of these groups varies from one person to the other, but what can be stated is that issues can rarely be seen solely through a prism of exclusive national identities. The opposing view that emerged in the debate about this issue of identity was put by those who disputed the harsh anti-Japanese rhetoric quoted above. This view was one based on the belief in the basic unity of all people on earth and so, the argument ran, the stress should not be put on the differences among people and barriers between nations, but on universal human characteristics and rights. However, those leading the campaign against the Japanese on the Gold Coast dismissed this as ‘fit only for discussion among academic zombies with lemming-like tendencies … we are

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not prepared to become guinea pigs in a genetic factory for the benefit of another international conspiratorial folly’.38 Bruce Whiteside denied that racism had anything to do with his hostility towards the Japanese. He said it had more to do with the desire to ensure that Australia in the future had economic security. However the second interview with him gave a more complex, veiled, but unmistakable set of feelings on the matter. There are two aspects to that [that is, land and property ownership in Australia by foreigners], from the point of view of aggression and non-aggression … in a sense of, there’s always been a friendly war going on between Australia and New Zealand, but we’re practically cousins … I venture to say that the British owning land here, the Americans owning land here, there is not the same degree of concern as what there is with the Japanese … The fact of the matter is you can’t change the mentality, you can educate people, but when it comes to an out and out stoush, people will revert to their natural inclination. The meaning of this comment is clear: Australians regard other members of the Anglo-Celitc ‘tribe’ as familiar, non-aggressive and friendly; but this is impossible to do towards members of another race, a race that is seen as being intrinsically aggressive. For they (that is, the Japanese) are a ‘sadistic enemy … well on the way to achieving their aim [to conquer Australia] … they are the same people today as those who horrified the world with their barbarous atrocities against those they conquered,’ wrote D. W. Barrett.39 This shows a belief in modes of national, if not racial behaviour that do not change, they are immutable, ‘once a Japanese, always a Japanese’. Such behaviour is set in concrete and was seen to mean that what the Japanese did to Australians in World War II they would do again in the 1980s. The politics of memory were at work on the Gold Coast as the twentieth century drew to a close. At the same time people hostile to the Japanese ownership of Australian assets felt that Australian politics, as it was practised in the late 1980s, was no vehicle for coming to grips with their fears of loss of national independence and control. Even Blainey wrote of Australian leaders and their attitude towards the Japanese in the following way: ‘We [Australians] cringe in the face of such mighty power. The most conspicuous form of cringing comes from certain federal ministers and government corporations who uncomplainingly see Australia’s future as tied firmly to Japan’s and

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who believe that public discussion of the dangers as well as the merits of massive Japanese investment should be curbed’.40 On the 8th of July 1990, there was a public protest on the Gold Coast. A column of 300 people marched through the centre of Surfers Paradise. There was Bruce Whiteside at its head, wearing a shirt with a large Australian flag on his chest, with ‘Heart of a Nation’ embossed on it. Behind him followed people carrying banners that said, ‘Don’t sell Australia’, ‘Australian Citizens against Foreign Ownership — Cairns’ and ‘No Jap Landlords’. The march ended on McIntosh Island Park where, amongst others, Whiteside addressed the gathering. He repeated his disclaimers against accusations of racism, argued for leaseholds for all foreign buyers, but kept his sharpest and most detailed remarks for the current politicians of Australia. According to him they were betraying the trust the people had put in them, they were not managing the economy in the national interest, they were selling the country out and, to try to balance the books, they were allowing foreign money in ‘for entirely the wrong reasons’. Words such as these are often uttered very much as a desperate cry from the heart.41 They are based on the conviction that those ‘up there’, those ‘in power’ were not listening. They were not listening to what the ‘little people’ were saying. Instead, those in power were pursuing their own agenda. Whiteside saw himself very much as one of this silent majority, ‘an ordinary bloke’ reflecting the views of mainstream Australia. In his unpublished manuscript, Yen for Australia, he wrote that he went into this campaign very much ‘as an innocent child’ with no hidden agendas, no racist vendettas and no personal mileage.42 He just wanted what was best for Australia. He saw himself leading this campaign against Japanese ownership in Australia very much as the spearhead of the ‘little people’. The reason he gave for his involvement was that politicians had lost sight of the national interest for the sake of preserving their political status and income.43 Whiteside’s views were straight populism. Populist political movements like this have sprung up at irregular intervals in most democracies, usually at times when significant numbers of people have felt that their lack of access to the levers of political power meant that their grievances were not being heard.44 The reason their grievances were not being listened to, according to those hostile to Japanese money on the Gold Coast,

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was spelt out by Anne Ruscoe, another letter writer to Postbag in the Gold Coast Bulletin: Hawke and Keating like chameleons changed to match their environment. They have attained the highest pinnacle and now move among the Gods of High Finance. They are a far cry from their humble beginnings and the rest of the ordinary Australians battling against the odds. When democracy is still spoken of around the country, it is in the muted tones one uses in the presence of the dying.45 There is a strong sense here that Prime Minister Hawke and his Treasurer had betrayed Australia’s interests and were now working for big capital, in this case for that coming from Japan. Two months later, Bob Hawke visited the Gold Coast and made a speech at the Japanese-owned Palm Meadows golf course resort in which he said that Japanese investment in Australia is ‘unequivocally welcome’. The riposte from Bruce Whiteside was sharp and to the point: ‘Mr Hawke is selling out our children’s heritage for a few miserable yen. What Bob Hawke said was tantamount to a fifth columnist.’46

The new globalised Australia welcomes the Japanese However, from the beginning, the Gold Coast had welcomed capital from the outside. In fact, the city was created by money being invested into converting sand dunes and swamps into valuable real estate, and those who funded this freewheeling development were regarded as local heroes.47 The elite, the movers and shakers of Surfers Paradise, had always been outward looking. Many local entrepreneurs had moved north from Melbourne or Sydney to make their fortune and saw new arrivals from wherever as only doing what they had done a decade or two earlier. Canberra’s policy of financial deregulation during the 1980s was welcomed by them. As a prominent Gold Coast construction consultant and surveyor commented, ‘… we cannot do without the development capital the Japanese are injecting into the economy … if they were to pull the financial plug from beneath us now, we would be in desperate straits on the Gold Coast’.48 Thus, people in the property and tourist industry viewed the rising hostility to Japanese investment with alarm. Public comments on this issue by people in the Gold Coast property industry were blunt and to the point:

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People who are opposed to change reflect the drawbridge principle, which cannot exist in a developing community. — A. Midwood.49 An epidemic of xenophobia [which is sweeping Australia] could result in economic isolation endangering Australia’s tourism industry. — APJ.50 There’s no such thing as a Japanese invasion. People talk of a takeover. I talk of development. And development with Japanese help. — Max Christmas.51

Finally, Fiona Campbell, a journalist writing in The Australian reduced the whole matter to a basic question: ‘If a Japanese company wanted to buy your house for a figure well over market value, would you sell?’52 If the views of those hostile to Japanese investment in Australia used words like ‘land’, ‘soil’, ‘aggression’, ‘control’ and ‘defence’, then here we find people talking about ‘development’, ‘change’, ‘market value’ and ‘tourism’. Theirs is a picture of Australia filled with images of economic progress and increased prosperity for all through open frontiers towards all countries. These spokespeople saw Australia as a confident continent that needs and wants the capital and skills that foreigners can provide and has no fears about how this may change Australia’s culture. The career and views of Lyn Ginns give some sense of what this meant. Lyn Ginns was the daughter of a Canberra civil servant. As a child she had spent two years in Japan when her father was posted there after World War II by the Australian government. She remembered what it was like to be a stranger in a country and felt empathy for the Japanese confronting hostility on the Gold Coast. ‘I’d hate to go where I knew I was not wanted — we never had that [in Japan] — the people were always very pleasant and helpful to us.’ She studied economics at the Australian National University, and in 1974 she entered the Treasury, where she was assigned to work in the foreign investment area. A desire for a change of lifestyle encouraged her to move to the Gold Coast. At the beginning of 1988 she took up a position with the real estate firm Max Christmas as a research economist. Her task was to monitor all aspects of the Gold Coast property market. Given her professional background and her contact with life in another country, it is not surprising that Ginns did not hesitate to articulate a world view in which Australia was open to the forces of globalisation. ‘[Hostility

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to the Japanese investors] riles me,’ she said simply. ‘We cannot afford to say capital has a nationality.’53 The advocacy of an integrated world economy in which capital could flow from one country to the other without any restrictions was a view that was very common among people whose livelihood came from dealing in money or property. For them, the market was what determined where the investors would put their capital. Governments had no right to interfere; if they did, they would only distort a process that ensured the greatest level of efficiency and returns on investment. In such a world view, the state is restricted to being an agency for the adjustment of national policies so that the efficient and profitable global economy can work in a seamless manner.54 The international property agency Jones Lang Wootton bought into the Gold Coast Japanese investment controversy and put this view at its simplest, ‘commonsense as well as logic suggests that if Australian investors can export capital overseas, then overseas investors from wherever should be able to export capital to Australia’.55 This is the world of the ‘level playing field’. Here, all countries reduce impediments to trade and flows of money to as low a level as possible. But how do a distinct Australian nation, a unique Australian cultural identity, particular Australian interests fit into this picture? The nation-state becomes a subsidiary to these forces of globalisation, but is not lost within a homogenised world. It is not absorbed into a global economic melting pot, but integrated into global economic flows of money, people and ideas. These processes, unimpeded from one end of the globe to the other, seek out the best locations to flow into; for example, if Japanese capital finds Australian property to be the most desirable and profitable in the Pacific basin, if not the world, then this will give Australia its economic distinctiveness and part of its unique character. This may sound somewhat simplistic, if not frightening to some Australians. Geoff Burchill, the Gold Coast economic consultant and developer, put such fears down to Australians having little experience of international relationships and of being ignorant of Australia’s sensitive economic position.56 To counter such fears, then, the idea of foreign capital flowing into Australia had to be made more appealing. Spokespeople like Geoff Burchill sought to couch it in terms of traditional Australian beliefs that would strike a chord with the bulk of the people. A key link was made between the arrival of foreign capital and the idea of national development; for development resonated with

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the idea of ‘opening up of the land’ and its associated myths, images often used by those hostile to the Japanese. Development also means jobs, prosperity and the ‘good life’. Ginns sought to counter the idea that Japanese property purchases and tourist projects were occuring to ‘make a quick buck’; they were long-term, she said. They would ensure the development of the Gold Coast and its future prosperity. Her response to those who complained that they didn’t want to see their children washing bottles and cleaning up after Japanese visitors was matter of fact: ‘If there is a job for someone doing that, I would prefer for that person to be employed rather than unemployed.’ To believe otherwise, is ‘to cut off your nose to spite your face’. Her employer, Max Christmas, argued that a strong correlation existed in Australian history between periods of great development, rising living standards and high levels of foreign investment.57 In other words, ‘it has always been thus’. The link between the flow of Japanese money and Australian prosperity even became the subject of many slogans. For example, Paul Everingham, a former Chief Minister of the Northern Territory and subsequently a corporate lawyer, led off a public speech with the rallying cry, ‘Asian money is a must … foreign investment is good, good, good!’58 Other, even more colourful, headlines appeared in the local press: ‘Japanese or the soup kitchen’, ‘One Japanese [visitor] is worth more than a few tonnes of coal’, ‘Each jumbo load of tourists could inject $100,000 into the Gold Coast’ and ‘Foreign investment will create the Australia of tomorrow’.59 Behind these slogans appeared to be the conviction that the flow of yen would ensure Australia’s continuing development and prosperity. Other advocates of Japanese investment met the critics of the Japanese presence on moral and cultural grounds. They did not shift ground, as some of those with a purely economic world view had done, but sought to counter the backward-looking, isolationist picture of Australia with one that was contemporary and compassionate. D. C. Adams, on the Postbag page of the Gold Coast Bulletin, asked the Japanese on the Gold Coast, … not to judge all Australians by the views expressed by a small minority. They may have reasons for their comments, but they don’t speak on behalf of all Aussies. Like a lot of others I served in the 1939–45 World War, but there is no way I can hold the grandchildren of our one-time enemy responsible for deeds committed by them.60

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Those expressing these types of views saw Australia as a Christian, compassionate country that forgives and forgets and believed that the ‘sins of the fathers or grandfathers’ should not be sheeted home to the next generation. In fact, these people tended to see the superiority of the British traditions of Australia in the ability of its people to be tolerant and forgiving and not be rigid and regressive, as they felt those hostile to the Japanese to be. This whole debate also raised the question of what Australia was in the late 1980s, an Australia half a century after the events to which those hostile to the Japanese were harking back. Was it still relevant to see it as a country with a racially exclusive population with a fragile hold over its large continent, a hold threatened by potential invaders from the north? Some people who entered this public debate on the Gold Coast answered ‘No’ to this question. Their feelings towards the Japanese were grounded in the belief that Australia had changed fundamentally from the country that it was when under threat in 1941–45. As one Gold Coast resident commented, ‘Australia has successfully absorbed millions of people from overseas without serious racial disharmony’.61 Therefore, the conviction that we have to raise the drawbridge against all those of other cultures and skin colours has become completely irrelevant. The reality is exactly the opposite. ‘We are a cosmopolitan society now and our birthright is based on a mix of races and cultures,’ said Richard Beam, an international property consultant in Surfers Paradise.62 What in fact people like Beam implied is that Australian national identity was the result of being open to the world and constantly absorbing

Bruce and Iris Whiteside as founding members of the Pauline Hanson Support Group. Source: Courtesy Fairfaxphotos

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new people, new influences and gaining new resources. Such an Australia has no difficulty with rising levels of Japanese investment and property ownership. It is the willingness to welcome new people and everything they bring that defines the Australia of the late twentieth century. The result was a country characterised by multiculturalism and constant evolution. This was how progressive groups saw the country during the 1980s and 90s and some on the Gold Coast echoed these views. It could be said that, as far as these people were concerned, it reflected their self-interest or conviction, or both .63 One suspects that for many people working in the tourist and property industry on the Gold Coast it was the idea of an Australia open to the free flow of people and capital that had the immediate appeal. However, they were sufficiently perceptive to realise that you could not welcome, say, Japanese investors, without accepting them as people with distinctive ways, manners and wishes. A globalised Australia did not just have an economic meaning but a social and cultural one as well. So, if capital from Japan and the rest of Asia could enter Australia, then barriers could not be erected against people and ideas from the same region. Those hostile to the Japanese could not be allowed to win this debate. The cost would be too high if they did. Another argument put by some people who spoke in favour of the Japanese being allowed to invest in Gold Coast property came at it from another direction. Their case was based on Australia being a country that needed the capital and stimulus that the Japanese could provide; for, as a society, Australia — in their eyes — had become lethargic, unadventurous and obsessed with ‘our sacred working conditions of long service leave, paid sickies and all those penalty rates’. It was not just the workers who made Australia lethargic, conventional, short-sighted and spoilt, but also many in the business community. A comment made in discussion by a Gold Coast planning consultant summed up this view quite succinctly: ‘We must have foreign investment from whatever source. The Australian investors, especially the banks, do not have the foresight to invest in tourist infrastructure. Our economy is just too immature for that.’ 64 Added to this picture of a short-sighted and immature business culture was that of a population that preferred spending to saving and so, by world standards, had a low savings rate and had always been forced to rely on overseas funds to maintain its prosperity.65

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The message of these people was loud and clear: whether Australians liked it or not, they had to acquiesce to foreign investment, whether from Japan or anywhere else. For the promise of the good life was deeply ingrained in the Australian psyche and that could only be achieved through open-door policies towards the rest of the world. But what of the Japanese in this heated debate? Even if at first glance the hostility was about their money and its ability to own and control Australian assets, behind it was the fear that some Australians had of them as people; people who were seen to have behaved in the past in an appalling way towards Australians and were therefore still regarded by some half a century later as unfathomable and threatening. They could not be expected to let the rising fury of the debate just pass over their heads. Journalists and TV crews from Japan did visit the Gold Coast and filed reports about the controversy the investments of their fellow nationals were causing there. For example, on 19 April 1990, the Mainichi Daily News in Tokyo featured a front page article under the title, ‘Queensland: Japan’s 48th Prefecture’. After giving a statistical account of the extent of Japanese property ownership in the state, the article ventured to comment that, ‘The question of Japanese property interests has become a sensitive one in Australia, where resentment of Japan’s wartime past mixes with a desire to attract new investment’.66 The level of interest could also be gauged by the fact that a number of mass circulation dailies sent representatives to Bruce Whitesides’s Heart of a Nation public meetings and two of them sought him out for private interviews.67 What was interesting, though, was that at a local Gold Coast level Japanese investors, visitors and Japanese residents avoided participation in the debate. Perhaps they had inhibitions borne of their limited knowledge of English, or they lacked an understanding of the culture of Australian public debate and so were wary of entering it. For whatever reason, letters in the Gold Coast Bulletin from Japanese readers were very few. But, on the other hand, can this be regarded as surprising? Would overt participation in the public debate have given them the reassurance about their welcome on the Gold Coast that they no doubt desired? Comments that were made by Japanese people in Australia were more often than not made by those not directly involved in Gold Coast property investment. These spokespeople were often in the

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Japanese business community in metropolitan Australia and appeared to fear that the goodwill they had built up in Australia was being threatened by the general rise of anti-Japanese sentiment that the Gold Coast controversy was causing. Thus, the chairman of the Bank of Tokyo, Yusuke Kashiwagi, used the opportunity of a meeting of the Australia–Japan Business Co-operation Committee to endorse his country’s investment stake in Australia but warned that ‘undue concentration of investments in specific sectors is liable to create public suspicion of Japanese good intentions’.68 These words of caution were echoed six months later by the public comments of the Melbourne managing director of the Japanese External Trade Organization (JETRO), but he added the rider that, ‘For every buyer there is a seller, and Australians seem to be keen to attract premium prices from the Japanese for their properties at present’.69 So they admitted there was a ‘problem’ with the concentration of Japanese capital in Australia in real estate, but if the Japanese investors had been aggressive in seeking out desirable property in prime locations like the Gold Coast then Australian real estate agents, companies and individuals were also aggressively targeting them as desirable buyers flush with money. Other Japanese business people in Australia were content to echo the general economic argument in favour of a deregulated world market, of which Australia was an inevitable part. Hence, all capital, whether Japanese or from other sources, scours the world for the most profitable location and if that happens to be in Australia then that is where it will seek to flow.70 Such opinions were in essence the same as what the economic supporters of Japanese capital were saying on the Gold Coast. In this sense they did not bring a new perspective to the debate. However, discussions on the Gold Coast did point to more finely nuanced attitudes and experiences. Kimiko VanderWal, the Gold Coast Japanese community worker and interpreter, had some insight into the interpersonal relationships between local Japanese and Australians. She ventured the comment: ‘Japanese people do not feel there is any hostility towards them. They are very happy here.’ She said it was the contact with individual Australians that they found most reassuring. She spoke specifically of the appreciation felt by many Japanese living on the Gold Coast of the kind deeds done for them by their Australian neighbours. Such feelings of happiness with

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personal contacts on the Gold Coast were also expressed by the president of the Japanese Society there and others with whom contact was established. It appears that the well-established Australian ambiguity towards newcomers was alive and well on the Gold Coast in the 1980s: ‘I hate all Dagos, but Giovanni next door is a good bloke’, the refrain of the 1950s, seemed to be sung half a century later with a new cast. At the same time, certain undertones also came to light that gave some pointers as to why the debate about the Japanese presence became so vociferous. A talk with Zin Sawachika, the Japanese property consultant and developer active on the Gold Coast, revealed some clues. When asked about the feelings of his fellow nationals about the anti-Japanese campaign being run there, his answer was thoughtful and subtle: ‘The Japanese people here are not dissuaded by Heart of a Nation campaigns. They are concerned, but not unduly.’ But it was the undertones he detected among his Australian business colleagues that gave him twinges of unease. He said that they liked the business with the Japanese, but when drunk he confided that, ‘in my heart’, they were worried about the Japanese buying Australia.

Heart of a Nation becomes One Nation Towards the end of 1996, the Whiteside home was again a hive of activity. Telephones were ringing, the computer screen was on for hours on end and the bell kept calling Bruce or his wife Iris to the front door to respond to a stream of supporters or well-wishers. This house in the Gold Coast suburb of Miami had seen it all before; eight years earlier it was the office from which the Heart of a Nation was run. However, as the flow of Japanese capital to the Gold Coast ebbed, so did the displays of hostility. The last public meeting of the organization attracted only 32 people. This time the clue to the new burst of activity could be found in a framed photograph hanging on the wall of the Whiteside garage. It was of a woman with bright red hair wearing a blue dress. Her name was Pauline Hanson, a person in whom Bruce Whiteside felt he had found a political soulmate. Pauline Hanson was originally the endorsed Liberal candidate for the federal seat of Oxley based in the town of Ipswich, 70 kilometres northwest of the Gold Coast. Prior to the 1996 federal election she was disendorsed by the Liberal Party for views that were deemed to be racist. She then stood as an Independent

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candidate and, on 2 March 1996, won the seat. She was known in the town because she had run a fish and chip shop. In her election campaign she said that the reason she decided to stand for parliament was because the views of the ‘real Australians’ were being ignored by the major political parties. She campaigned on a platform of job security through high tariff protection for Australian industry, no sale of Australian land to foreigners and an end to most migration, especially from Asia. This seemed to show that the belief in a conservative Australia, segregated from the forces of globalisation, was again alive and well. Pauline Hanson’s electoral success quickly encouraged her to test the water to see if she could establish a national movement or political party that reflected her views. She started accepting invitations to make speeches in southeast Queensland and then right throughout Australia. Bruce Whiteside heard her speak on the Gold Coast. ‘When I first heard her speech I nearly wept because it was what I was trying to do years ago,’ he said, and Iris Whiteside added, ‘She’s just wanting to speak for all of us. Mr And Mrs Oz, I call them.’71 In October 1996, Bruce Whiteside established the Pauline Hanson Support Movement, with his wife Iris acting as its secretary, and with its headquarters in his garage. He spoke of Pauline Hanson as a ‘modern-day Joan of Arc’ and saw her as wresting ‘the destiny of this nation from those who believe that our future lies with pandering to the big “A” factor, Aborigines and Asians’.72 The One Nation party which Pauline Hanson and her supporters established seemed to gather momentum. In the Queensland state election of 13 June 1998, One Nation campaigned on a platform that had strong echoes of the sentiments expressed a decade earlier by those hostile to the Japanese presence on the Gold Coast. One Nation advocated an immigration policy that would only admit as many people into Australia as left each year. More pointedly, every immigrant would have to pass an English language test before gaining admittance. Foreign investment would be tightly controlled, it would be limited to joint venture arrangements with controlling interest to remain with the Australian joint venture partner. The strongest echo of the Gold Coast dispute was heard in the One Nation policy on land ownership: no foreigner would be permitted to gain freehold title to any land other than for industry infrastructure development.73

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One Nation received 23 per cent of the total vote and gained 11 out of the 89 seats in the Queensland parliament. A political commentator writing in the national daily, The Australian, described the success of One Nation in the following terms: The phenomenon of Pauline Hanson has relied on fear and fury — the fear of a world that is changing too fast for many to keep up, the fury at being left behind — us, the salt-of-theearth, true-blue Aussies.74 So this reactionary political wind which had started up on the Gold Coast then blew through Queensland and spread until finally it fanned the whole of national political life. During the next few years, the Liberal Party, and especially the National Party, were buffeted by its electoral and ideological gusts. However, the 2001 Federal election showed that the One Nation wind had abated, but not before leaving important imprints on the direction of Canberra policy: a reduced immigration program, with an emphasis on English language skills; no more mention of any slogan of ‘Australia is part of Asia’; the imposition of very tight controls over Australian borders to prevent Asian asylum seekers landing, and financial inducements being paid to divert to Papua New Guinea and Nauru those asylum seekers already on the way. All political commentators agreed that these policies played a crucial role in returning the Liberal/ National Party coalition government to power. The One Nation party may have become a spent force, but not without leaving its imprint on the climate of national opinion and Canberra policy. In a similar sense the catalyst of Japanese capital in Australia may have vanished but the attitudes and fears it provoked are still there. Whether it is Japanese buying Australian property, factories closing down because of Asian competition, or asylum seekers wanting to berth clapped-out boats on Australian beaches, the fear of change, the fear of unfamiliar people, the fear of the loss of traditional beliefs, these fears keep reappearing in one form or another in the rapidly changing world at the beginning of the new millenium. Therefore, the Gold Coast dispute was a phenomenon that can be said to be typical of the reaction of the conservative, the parochial and of those who see rapid change as a loss of something that gave their lives benefits and meaning. Governments have to react to such fears, and react they did in the 1980s to the political explosion on the Gold Coast.

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Footnotes 1

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‘Japanese Takeaway — Backlash looms as spending spree widens’, Business Review Weekly, 31 March 1988, p. 46; Courier Mail, 4 November 1988. I conducted two lengthy interviews with Bruce Whiteside on 17 and 19 October 1994 and, except where otherwise stated, his opinions quoted in this chapter are based on those texts. The two relatives who fell were 11696 Pte. Gerald Thompson, NZEF, age 18, and 8//4495 Pte. Claude Thompson, NZEF, age 17. Bruce Whiteside, 1993, Yen for Australia, unpublished manuscript, pp. 20–21. Quoted in Time, 11 July 1988. National polls conducted on the issue of Japanese investment during this period showed that there was a significant level of apprehension about it. ANOP surveys of 1,500 people nation-wide commissioned by the Japanese Embassy in Canberra in March 1988 and March 1994 showed the following results: about one in eight respondents (12 per cent and 13 per cent) admitted disliking Japan because of World War II memories; about one-third (36 per cent and 31 per cent) thought Japan would again become a military threat to Australia; on the question of Japanese investment in 1988, 36 per cent thought there should be less, 39 per cent agreed with the present level, while 17 per cent thought there should be more; in 1994, after the controversy had abated, the figures were 33 per cent, 39 per cent and 22 per cent respectively. The Morgan Gallup Poll on Japanese investment of March 1990 showed that 69 per cent said ‘Too much’, 21 per cent ‘About right’, four per cent ‘Too little’ and six per cent ‘Can’t say’. These meetings were on 24 May and 4 July 1988, 7 February and 20 November 1989, 2 July 1990 and 11 June 1992. The editor of the Gold Coast Bulletin estimated that during the years 1987–1990 between 280 and 300 letters were published on the issue of Japanese investment in Australia. The peak months were May and June 1988 when 45 and 33 such letters respectively appeared on their Postbag page. David Walker in his book Anxious Nation: Australia and the Rise of Asia 1850–1939 (QUP, Brisbane, 1999) develops this theme in all its complexity. Robert Hughes, ‘Australia more like the land of the free’, The Weekend Australian, 8–9 May 1993. J. G. Hajdu, ‘The Gold Coast, Australia: Spatial model of its Development and the Impact of the Cycle of Foreign Investment in Property during the late 1980s’, Erdkunde, vol. 47, no. 3, 1993, pp. 40–51.

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14 15 16 17 18

19 20

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26 27 28 29

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At the beginning of the period under consideration in this book, at the 1986 census, 27.7 per cent of the population of the Gold Coast was over the age of 55, and 15.9 per cent were over 65. The figures for the same age groups in the population of metropolitan Melbourne were 19.5 per cent and 10.4 per cent respectively. It is noteworthy that during the period of this rapidly rising Japanese presence, the Gold Coast Bulletin ran four feature articles that can be seen as playing on the memories of many of its older readers. These were titled: ‘A time to remember: Changi hell-hole left a generation scarred’ (GCB, 17 October 1986); ‘POWs still suffer horrors inflicted by the Japanese’ (GCB, 6 February 1989); ‘After Changi and the years of rejecting things Japanese, it’s time to “bury bitter memories”’ (GCB, 4 October 1990); ‘Why Japan must pay the price for war atrocities’ (GCB, 17 September, 1991). Gold Coast Bulletin, 4 August, 1989. Gold Coast Bulletin, 3 August 1990. Gold Coast Bulletin, 7 June 1990. D. Thomas, Gold Coast Bulletin, 25 April 1990. J. Barnes, ‘Legend’, in Nile, R. (ed.): Australian Civilisation, Oxford University Press, Melbourne, 1994, pp. 41–57. N. Palmer, Talking it Over, Angus & Robertson, Sydney, 1932, p. 25. J. Rickard, Australia: A Cultural History, Longman, London, 1988, p. 222. The concept of the ‘politics of memory’ was identified by Boyarin. He defined it as ‘the rhetoric of the past mobilised for political purposes in the present’. He argued that this means that if a contemporary event is interpreted by a group of people to echo something that had a great effect on them earlier in life then they will respond to the contemporary event in a similar way. J. Boyarin, ‘Space, time, and the politics of memory’, in J. Boyarin (ed.), Remapping Memory: The Politics of Time Space, University of Minnesota Press, Minneapolis, 1994, p. 2. John Cumming, Lucky be Damned, Boolarong Publications, Bowen Hills, 1993, p. 12. Lucky be Damned, p. 60. Lucky be Damned, p. 13. Gold Coast Bulletin, 25, 26, and 22 March 1988 (in order of the quotations). What is Heart of a Nation? May 1988. Gold Coast Bulletin, 1 September 1987. Gold Coast Bulletin, 6 October 1988. Daniel Burstein, Yen! The Threat of Japan’s Financial Empire, Bantam/Schwartz Books, Sydney, 1989. Yen!, p. 31.

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Burstein saw the US–Japanese relationship in the form of the following equation: ‘Thus, while the United States has become the world’s leading debtor, Japan has become its leading creditor. While we consume more than we produce, Japan produces more than it consumes. While our dollar weakens, Japan’s yen strengthens. While we lust for imports, Japan’s passion is for exports. While we deregulate and fragment our society, Japan maintains s strong central plan and national cohesion.’ Yen!, p. 26. Yen!, pp. 45–51, 294–7. Geoffrey Blainey, All for Australia, Methuen Haynes, Sydney, 1984. The venue was a luncheon organised by the Liberal MHR for MacPherson, Peter White, in Surfers Paradise on 21 April 1988. Lucky be Damned, p. 12. R. White, Inventing Australia: Images and Reality, Allen & Unwin, Sydney, 1981, pp. 70–71. David Walker argues that Australian national identity was strongly racial and evolved from the beginning of the twentieth century as a reaction to the suspicions and fears about the nature, intentions and actions of the Japanese; Anxious Nation, pp. 85–97. Adrian Davies, Postbag, in Gold Coast Bulletin, 5 May 1988. Gold Coast Bulletin, 15 April 1988. Geoffrey Blainey, ‘It’s time to talk about Japan’, The Weekend Australian, 22–23 October 1988. Bruce Whiteside called it ‘a plaintive cry from the people of Australia’. Yen!, p. 48. Gold Coast Bulletin, 13 February 1989; John Cumming wrote in an even more harshly critical tone when saying that the economic policies of the Hawke–Keating government meant that ‘they were up to their necks in a process that was bleeding our country dry’, Lucky be Damned, p. x. Scholars of populism in politics agree that it is characterised by the mobilization of groups of people who feel alienated from the political and economic elites of their societies. Features of political populism are: anti-establishmentism, a nostalgia for a past of national harmony, if not heroic endeavour, its inclination towards racism and a belief that the best human virtues reside in ‘the people’, ‘the little person’. See: M. Canovan, Populism, Harcourt Brace Jovanovich, New York, 1981; E. Laclau, Politics and Ideology in Marxist Theory Capitalism and Fascism–Populism, New Left Books, London, 1977; J. Richards, ‘Populism: A Qualified Defence’, Studies in Political Economy, vol. 5, 1981, pp. 5–27. Gold Coast Bulletin, 4 November 1988.

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48 49 50 51 52 53 54

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Gold Coast Bulletin, 13 February 1989. Michael Jones, A Sunny Place for Shady People, Allen & Unwin, Sydney, 1986, p. 122. Alan Midwood, in Gold Coast Bulletin, 1 July 1988. Gold Coast Bulletin, 1 July 1988. Australian Property Journal, vol. 1. no. 1, June 1989, p. 41. The Australian, 8 August, 1987. The Australian, 30 June, 1990. Gold Coast Bulletin, 16 November 1988. R. W. Cox, ‘Global restructuring: Making Sense of the Changing International Economy’, in: R. Stubbs & Underhill, G. R. D. (eds), Political Economy and the Changing Global Order, Macmillan, London, 1994, p. 49. Jones Lang Wootton, Property Trends, Sydney, 1989, p. 7. Gold Coast Bulletin, 11 November 1988. Max Christmas Pty Ltd, The Market Report, January 1989, p. 69. Gold Coast Bulletin, 30 April 1990. Gold Coast Bulletin, 28 March 1989 and 30 April 1990. Gold Coast Bulletin, 6 April 1989. Gold Coast Bulletin, 24 January 1990. Gold Coast Bulletin, 13 August 1987. Perhaps one of the best examples of a national publication that reflects this view of Australia is a work of James Jupp. See J. Jupp (ed.), The Australian People: An Encyclopedia of the Nation, its People and their Origins, Angus & Robertson, Sydney, 1988. Gold Coast Bulletin, 28 May 1988. D. Clark, ‘Foreign Investment in Australia: The Hard Facts’, Real Estate Institute of Australia Ltd Professional Series 2, p. 4. Mainichi Daily News, 19 April 1990. For example Kenji Shiraishi of the Tokyo-based mass circulation Asahi Shimbun attended the Heart of a Nation meeting in the Miami great hall on 2 July 1990, he subsequently interviewed Bruce Whiteside. Shiraishi extended his stay in Australia and, with the help of the Japanese Study Centre of Monash University, researched the topic of Australia’s reaction to Japanese behaviour during World War II. The Age, 23 November 1988. The Weekend Australian, 11–12 February 1989. The speech made by Tatsuya Hosino of the Overseas Realty and Development Division of the trading conglomerate C. Itoh and Company stated this viewpoint most clearly. See Jones Lang Wootton, Property Trends 1989, Sydney, p. 11. Sun-Herald, 8 December, 1996.

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Matt Condon, the journalist who reported this interview with Bruce Whiteside, then added the comment: ‘Outside the office you can hear a tourist helicopter buzzing by. This mecca of Asian tourism in Australia unquestionably owes much to the foreign tourist dollar. But only last week the local mayor, Ray Stevens, admitted for the first time that tourism had been hurt by Ms Hanson’s so-called racist debate.’ Sun-Herald, 8 December, 1996. Manifesto, ‘Primary Industry Policy’, Pauline Hanson’s One Nation, 1998, p. 4. Leisa Scott, ‘True blues choose one of their own’, The Australian, 15 June 1988.

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Chapter 8

Governments buffeted by cross-currents of public pressure, interests and ideologies

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oreigners buying land and dwellings in Australia has always been a latent issue in national politics. This became the case particularly during the mining boom of the late 1960s. Hence, in the 1972 elections, the Labor Party campaigned on a policy of ‘buying back the farm’. The establishment of the Foreign Investment Advisory Committee (FIAC) in 1975 was the main result of this policy. The following statement by Whitlam clearly shows its basic philosophy: Australian ownership and management of land as far as is legally possible. Real estate acquisitions would be disallowed unless made for the purpose of employee residence, uses incidental to commercial ventures or for a specific time period, after which they would be resold to Australian interests.1 Twenty-one years later, a statement by Ralph Willis, another prominent Labor Party government minister, could not be more different:

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The Australian Government is strongly supportive of international measures to encourage flows of investment capital. Though we do resist investment flows in sensitive areas, such as residential dwellings. This is to prevent land banking and to discourage speculation. Though no such general restrictions apply to commercial real estate.2 In the intervening period, much of the ideological baggage of socialism had been discarded and the free flow of capital into Australia was now the pre-eminent consideration, but special mention of real estate was still made. Land for homes, and the homes themselves, are politically the most sensitive aspect of all foreign investment — hence, it is not surprising that residential real estate merited special mention. At the same time, in the decade that followed 1975, the control mechanism over foreign investment that the Whitlam government established was progressively relaxed. In 1976 the Liberal/National Party government of Malcolm Fraser replaced the FIAC with the Foreign Investment Review Board (FIRB) as the vetting authority for foreign investment proposals. It gave it a membership that was dominated not by civil servants but by business people. In other words, people who could be expected to be more sympathetic to foreign investment proposals. Also, loopholes appeared in the vetting procedures and, during the years that followed, these loopholes became progressively bigger. The original powers of the FIAC and then FIRB meant that all foreign nationals wanting to buy land or real estate in Australia had to be referred to the FIRB and gain approval. But, on 8 June 1978, a minimum threshold for referrals to the FIRB was introduced: homes valued at less than $350,000 and commercial and tourist property worth less than $2 million could now be bought by foreigners without the need to gain FIRB approval. On 29 October 1985, these thresholds were increased to $600,000 for homes and $5 million for commercial and tourist property. A period of progressive freeing up of controls on the flow of capital into and out of Australia had set in.3

Canberra’s reaction to the flood of Japanese investment The Commonwealth government seemed to have accepted that the free flow of capital in the world was a desirable state of affairs. In fact Canberra argued that Australia’s future prosperity was dependent on being locked ever more tightly into a global economy, and that meant removing as many obstacles to capital

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flows as possible. There were many influential politicians, business people, professionals and cosmopolites in Australia who supported this government stance. Such groups regarded the flood of Japanese money that poured into the Australia from the mid-1980s onwards as proof of their belief in the munificent forces of globalisation (see Chapter 7 for more details). However, Canberra soon experienced a political shock: not all Australians welcomed such unbridled flows of foreign money, especially when it came from Japan, was highly concentrated at specific locations and went overwhelmingly into buying up land and real estate. The latter half of the 1980s saw a property boom in Australia and the increasing financial difficulties being faced by first home buyers wishing to enter the market was becoming a political issue to which the Federal government was increasingly sensitive. Furthermore, many people believed that the flow of Japanese money was a prime cause of this property inflation. Press headlines such as ‘The new Asian invasion: how Australian property is being sold off’, only added to such fears.4 On 29 September 1987, the Federal Treasurer, Paul Keating, acted.

‘And here’s the best-case scenario …’ Source: Cartoon by Nicholson from The Age. www.nicholsoncartoo ns.com.au 18/06/1990

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Keating announced a new set of regulations for the FIRB, regulations that were much more restrictive to foreign property investors than anything seen since 1976. In one fell swoop they reversed the whole thrust of government policy of the previous decade. These regulations limited home purchases by foreign investors to new dwellings.5 In new golf course resorts and new high-rise apartment projects, foreigners could only buy up to half of the total number of units being put on the market.6 A foreign investor could still buy urban development land wherever and in whatever quantities they wanted, but the developer had to start work on the project within one year of the purchase of the land. Any land speculation in the form of ‘land banking’ was not to be tolerated. Commentators at the time saw an obvious rationale for these new restrictions: more and more people were blaming Japanese investment, largely in Sydney and the Gold Coast, for the escalation of house prices. A rise in anti-Asian sentiment was the last thing Canberra wanted at a time when it was trying to persuade the public that Australia’s future lay with Asia.7 On the day after the announcement of the regulations that tightened foreigners’ ability to buy Australian land and property, the Gold Coast Bulletin appeared with the blazing headline, ‘Keating move rocks industry: estate market shock’.8 The people in the local property industry had good reason to believe that government controls on foreign investors would soon be a thing of the past and now a complete reversal of this trend had occurred. Bruce Whiteside and those who thought like him could be expected to be thrilled. Their increasingly loud murmurings were being heard where it mattered, in Canberra. This raises the question: If Keating’s restrictive FIRB regulations were introduced in response to increasing unease about Japanese property purchases, why didn’t their introduction stop any further Gold Coast protests? In fact they didn’t. The first public protest meeting against Japanese investors was held in the Miami Hall on the Gold Coast on 24 May 1988, eight months after Keating made his policy announcement. A number of explanations can be suggested. An obvious one is its timing in relation to the Gold Coast property cycle. This had started to accelerate in the second quarter of 1986 and surged to a record high by the third quarter of 1987, with the rise in Japanese capital flowing into Gold Coast property running in tandem with it.9 Canberra had reacted at the peak of the boom, two weeks

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before the Wall Street share market crash. As far as the extreme opponents of Japanese investment in property are concerned, it was too late. In their view the ‘national sell-out’ had already occurred. Furthermore, not only was it too late, it was also too little. The new tightened regulations still allowed up to half of the homes in new projects to be bought by foreigners and neither were there any restrictions on the purchase by foreigners of raw urban development land, nor of any commercial property. Behind it all was the issue closest to the heart of the anti-Japanese protestors on the Gold Coast: giving freehold title on Australian land to foreigners. There was no mention of this issue in any federal government statement. So, in their eyes, the ‘selling off of the farm’ would continue as before the 29 September 1987 regulations were announced. However, one could think that the very existence of an active Foreign Investment Review Board within the bureaucracy of the federal government would signal to the anti-Japanese groups on the Gold Coast that Canberra was aware of their concerns. For this was obviously what the federal government had in mind with the reappraisal of the FIRB’s guidelines. But here the workings of the FIRB and the way they were perceived by those concerned about foreign investment have to be looked at more closely. Its deliberations were seen as very secretive and its decisions generally acquiescent to the foreign investor. During the nine-year period between 1983–84 and 1992–93, 16,962 applications were lodged by foreign nationals for permission to buy property in Australia, of this total number of applications only 354 were rejected.10 This was a rejection rate of 2.09 per cent.11 Such figures say nothing about the size, scope or value of any of these purchases that foreigners sought to make, but in a general sense they do make the point that the FIRB did not act as a major hurdle to be jumped by any foreigner, Japanese or from anywhere else, who sought to buy or develop real estate ventures in Australia. People on the Gold Coast felt that they had always known this, hence did not attach much faith to the existence and workings of the FIRB. One writer in the Postbag page of the Gold Coast Bulletin referred to the FIRB as ‘nothing but a rubber stamp’, whereas another saw it as ‘so much gobbledegook to make it seem that something has been done to control investment in some way’.12 In October 1994, seven and a half years after the restrictive guidelines for foreign investment into land and property were

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announced, Bruce Whiteside commented that ‘the FIRB is no deterrent to Japanese investment, nor to ownership, as its pathetic record in this regard attests to’.13 As far as the anti-Japanese groups on the Gold Coast were concerned, this became clear straight after Treasurer Paul Keating announced the restrictive guidelines on 29 September 1987. For, within a week of that announcement, the FIRB had moved to quell fears that investment applications would be treated harshly in this new restrictive climate. It took the unusual step of going public to assure applicants that everything would be done to ensure the smooth and quick processing of their proposals.14 The secretive nature of the FIRB’s deliberations was also not helpful in gaining the confidence of those in the community who wanted tight controls on foreign investment. The reason for this secretiveness was that the work of the FIRB was covered by the confidentiality laws of the Taxation Department and was therefore exempt from the provisions of the Freedom of Information Act.15 The published reason for an application to purchase by a foreigner being rejected by the FIRB was usually that to give permission would ‘not be in the national interest’, and what ‘national interest meant’ was never explained. Before he retired, Sir Bede Callaghan, the Chairman of the FIRB from its inception in 1976 to 1992, agreed to give an interview. In this interview Callaghan conceded that ‘not much has been rejected in recent times’, and he also ventured the opinion that there was ‘no need to spell out in greater detail what the term “national interest” meant in the foreign investment guidelines’.16 On the Gold Coast, two major Japanese-funded proposals were rejected by the FIRB.17 The only reason given was that their purchase by a foreign company was not in the ‘national interest’. The local press sought to spell out what it thought the ‘national interest’ meant. They wrote that the cause of the rejections was the inability of the Japanese company to provide a clear time-line of the development proposed on the site.18 Ministerial statements had already made it clear that accumulating land without definite plans for its use was against government policy. Hence, it appears that ‘national interest’ meant there had to be a clear link between the purchase of land by a foreigner and some form of development. Investment had to be seen to trigger some form of productive economic activity and, especially, the creation of jobs. If it did not, it was viewed by Canberra with much more suspicion.

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The link between foreign investment and national development was made at the highest level of Australian government. Prime Minister Bob Hawke made this clear in a keynote speech during the visit of his Japanese counterpart Noburo Takeshita to Australia. In this speech, Hawke gave an unqualified welcome to Japanese investment, making special mention of foreign investment in Australian real estate and its contribution to national development. He also said that the attitudes of those who are critical of such investment ‘are repugnant to the overwhelming majority of Australians’.19 So it appeared that, in the Japanese investment controversy, the Federal Labor government was playing a double game. On the one hand, the rising hostility towards Japanese real estate activity, especially on the Gold Coast, led it to tighten investment guidelines to protect the ‘national interest’. But development was in the national interest and Canberra saw foreign investment as a key to national development. So Canberra left sufficient areas of property investment deregulated to enable most foreign investors to achieve their aims.20 In a way, the government was caught between the pressures of global capital and local community feelings. Therefore, it had to act, and be seen to act, or it would be highly likely to suffer political damage. But, if the action it took was too restrictive towards foreign capital, its vision of capital inflow equalling long-term economic growth and national prosperity would be endangered. So the Labor government was buffeted by contradictory aims, ideologies and economic and political considerations. They weren’t the only political party to feel such pressures. If the Labor Party came at this issue from a fading socialist past, then the Liberals came at it from the opposite direction. The Liberal and National Party were in opposition in Canberra during the whole time of the Japanese investment controversy. Oppositions oppose, so there is pressure on them to contradict what the government has proposed. Being in opposition also means that a political party does not have to concern itself with the compromises that often go with the responsibility of implementing a policy. As a result, the party can articulate views of greater ideological purity, which it is often tempted to do. The Liberal Party has been the traditional free-enterprise party and has argued in a philosophical sense that less government

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intervention in the economy is always the best. The Liberals usually applied this ideology to the international flow of capital. In May 1989, the leader of the federal Liberal Party, John Howard, made a definite public pronouncement on foreign investment. He stated that any government led by him would have a more open-door policy than that of the Labor government in power in Canberra at the time. A key part of this policy would be abolition of the FIRB. Thus, the Liberal Party appeared to want to abolish the only government instrumentality that recorded, evaluated and filtered the purchase of Australian assets by foreigners. Howard referred to the critics of foreign investment as going down the path of ‘blind chauvinistic reaction’.21 However, the controversy about foreign investment on the Gold Coast would not go away and there were signs that it was starting to force the Liberal Party to think about repositioning itself on this issue. This occurred in 1990 under its new federal leader, John Hewson, a politician least likely to be sympathetic to the idea of restricting foreign investment. For his background and ideological predisposition was more economically ‘dry’ and ‘globalist’ than any federal leader the Liberal Party had ever had. Hewson was an academic economist, banking consultant and a fervent advocate of economic deregulation and Australia’s unfettered integration into the world economy. But what he sensed was happening on the Gold Coast led him to pause. Within two months of becoming leader of the Liberals, Hewson mused publicly about the high concentration of Japanese investment in real estate and added, ‘that gives you a particular basis for the emotionalism that is emerging’.22 Later that year, he made a point of visiting the Gold Coast to open the new electoral office of the Liberal MHR for McPherson, the federal seat that included the Gold Coast area. Nothing startling in that except that six months earlier, in February 1990, that same Liberal politician, John Bradfield, had made the following speech: … let me say that I am very worried indeed about the level of foreign investment on the Gold Coast. I know Liberal Party policy is to abolish the Foreign Investment Review Board, which has proved to be a toothless tiger … I believe that it is wrong to give foreign companies open slather on Australian land and resources. If my stand conflicts with Liberal policy then I shall certainly not hesitate to say so.23

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This wasn’t all: a fortnight earlier Bradfield had already made a public statement in which he urged the government to give the FIRB extra teeth, and even suggested that the ultimate demand of Bruce Whiteside and Heart of a Nation be investigated — leasehold titles only for all foreigners who bought land in Australia.24 The public controversy on the Gold Coast flickered and flared with each new investment announcement by a Japanese company.25 The member for McPherson ensured that his comments were heard to echo, albeit in a moderate way, the concerns of many in his electorate who perceived any Japanese property initiative as a threat.26 The fact that by doing this John Bradfield was putting himself at odds with the policy of his party appeared not to cause him undue worry. Far more important for him appeared to be to act as a weather wane for the electoral community from which he drew his support in his seat of McPherson. However, as mentioned earlier, the fact that the leader of the Liberal Party chose to come to the Gold Coast and be identified with him showed that the unease about what was happening among many traditional Liberal voters had reached the highest levels of the Party. If the Liberal Party was given cause for concern by the wave of anti-Japanese feeling on the Gold Coast, then it touched an even more sensitive nerve with their traditional political allies, the National Party. For, even though the Nationals had also nailed their flag to the mast of free enterprise, there was a strong streak of rural socialism in their world view. Also, they appealed most strongly to the more insular rural voter, the type whose national imagery of a proud, Anglo-Celtic Australia Bruce Whiteside and his Heart of a Nation was articulating ever more loudly. Not surprisingly the Nationals entered the public political fray on this issue because of an instance of rural land passing into Japanese hands. When news of a Japanese company’s purchase of a feed-lot property, an abattoir and meatworks in New South Wales came out, Bruce Lloyd, Deputy leader of the National Party, went public and called for tight restrictions on Japanese purchases of Australian land.27 The Federal National Party leader was Ian Sinclair and his electorate happened to be the seat of New England, just south of the Queensland border in northern New South Wales. This meant that much of his electorate was within easy regional television range of the Gold Coast. The clamour of the Gold Coast

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anti-Japanese controversy was being flashed into the electorate at frequent intervals. It prompted Ian Sinclair to enter the debate with a comment that reflected the opposing pressures he was under. He said that: His supporters in the National Party were very worried about Japanese investment … Asked how his views squared with the promise of the Opposition Leader, Mr Howard, to allow a more liberal investment policy, Mr Sinclair said that the conservatives had always been more liberal in this area … Our concern is the way in which it should be administered … The Federal [Labor] Government’s tighter regulations on the foreign purchase of residential properties were ‘nonsense’.28 It is a fair guess that Sinclair hoped his political supporters would not realise that his comment was riddled with contradictions. That he was forced into taking such an illogical, contrary position was not surprising. On one side of him were his traditional political allies, the free enterprise, laissez faire Liberal Party, but on the other were the National Party voters, many of whom were increasingly susceptible to the loud cries of dispossession and loss of Australian sovereignty that were coming out of the Gold Coast. Perhaps what Ian Sinclair sought to achieve with his comment was to convert himself into a moving target to avoid being hit by bullets fired by one side or the other in the battle between the opposing groups in the Japanese investment conflict. The fourth significant party on the national political stage during the late 1980s was the Australian Democrats. Their political position could be best described as small ‘l’ liberal. They were not aligned with capital in the way the Liberal Party had been, neither did the Democrats have the trade union affiliations, the residues of a socialist ideological baggage, and the responsibility of power in an increasingly globalised economy that the ALP had at the time. The fact that they were not likely to ever form government made the pursuance of a consistent policy direction that much easier. Also, as their power base was in the Senate, they had no local member who had to duck and weave to avoid the political bullets that were flying between the combatants in the Gold Coast foreign investment battle. The Australian Democrats consistently called for tight regulation of land purchases by foreigners. ‘We say no land should

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be owned by a non-resident of Australia in the first instance and, ultimately, none should be owned by a non-citizen,’ said its leader, Senator Janine Haines.29 Ultimately, foreigners would be restricted to leasehold titles. The Democrats regarded the FIRB as a ‘paper tiger’. They saw it as being understaffed, overly secretive, and working under guidelines that, despite Treasurer Keating’s announcement of 29 September 1987, were filled with loopholes that enabled most large-scale foreign investors to buy the development land they wanted.30 So the Democrats policy would be achieved by the abolition of the FIRB, and its replacement by a Foreign Investment Review Commission accountable to Parliament. This new institution was to work under tight guidelines that would enable it to achieve the policy aims as enunciated by Senator Haines. The Democrats were careful to distance themselves from the racist and xenophobic views that some members of the antiJapanese groups were shouting on the Gold Coast. Their belief in Australians retaining ownership of their country’s land had more to do with a general belief in the desirability of a national economic sovereignty of the Australian people, as well as a suspicion of global business interests and their ability to manipulate politics in Australia in ways that were against the country’s national interests. As it happened, one of their Queensland Senators, Cheryl Kernot, was a Gold Coast resident and she entered the debate a number of times in ways that distanced her party from the antiJapanese rhetoric yet articulated a viewpoint based on the safeguarding of Australia’s national assets. She met the argument of the spokespeople who said that Australia needs all foreign investment to ensure development, jobs and prosperity by saying that, … if the government restricts overseas sales [of land] to leasehold, Australians will still be employed in the construction and running of businesses, whilst the overseas investor will still enjoy their potential profit.31 In other words, the lack of a freehold title would not deter the foreign investor, so the Australian belief in the equation foreign capital investment equals national development and prosperity, would continue as before.

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Queensland: development versus isolationist populism The states in the Australian federal system have frequently played an important role in articulating the concerns of their regions at a national level. So it was not surprising that the Japanese investment controversy on the Gold Coast would have strong reverberations in Queensland politics. Brisbane would have been drawn into the political conflict if for no other reason than that the FIRB guidelines stated that it had to liaise with state governments and, where relevant, take advice from them.32 But, more importantly, all state governments are seen as being primarily responsible for responding to the needs of their people and managing change in their immediate environment. So the Queensland government had to respond to the rising chorus of protest about Japanese investment that it heard from the Gold Coast. In turn, the form of its response as the controversy progressed was connected to crucial political events that occurred during the late 1980s, not to mention some features of Queensland politics that have given it features peculiar to that state. On 2 December 1989, there was a change of government in Queensland. Hence, there was the repositioning of the two major parties from being in opposition to sitting on the government benches and vice versa. This led them to change the tone of their comments on foreign investment with surprising speed. However, in the first phase of the Japanese investment conflict, Queensland was governed by a National Party government with its longentrenched conservatism touched, as it always had been, with more than a dollop of populism.33 Queensland has been traditionally a ‘branch-office state’ in relation to the head offices of Sydney, Melbourne and, increasingly, New York, London and Tokyo. Historically, this gave the Queenslanders a sense that decisions were made for them by ‘others’ far away. This sense of powerlessness over their economic destiny has been used skilfully by premiers such as Sir Joh BjelkePetersen to shore up his Queensland support in political conflicts with Canberra. At the same time, his National Party government pursued a two-edged policy of encouraging state development by facilitating investment by large foreign mining companies while at the same time using rhetoric that reinforced the myopic conservative sensitivities of its voters. So, on the one hand, the National Party government was pursuing development policies that encouraged the incorporation of Queensland into an ever more

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globalised economy, on the other it was feeding the latent isolationist conservatism of its voters. At some point, this ambivalent policy bundle would start to unravel. The Japanese real estate investment issue was that point. On 19 October 1988, the Hon. W. L. Glasson, Minister of Land Management in the National Party government, made a lucid statement on the dichotomy between Queenslanders’ desire for development if need be through foreign investment and their fears of a loss of ownership that such development can bring. In his parliamentary statement he said: Mr Speaker, we are in our bicentenary year. It must be understood that the development which has taken place in the last 200 years, whether for better or worse, has resulted from the influx of new settlers to this country, and in investment in money from overseas … it has been said that we should not allow foreigners to own land. On the other hand, it has also been said that foreigners cannot take land home. It remains here. The community has to decide the extent and the direction

‘You don’t want Australia’s real estate owned by foreigners, do you Jacky?’ Source: Cartoon by Tanner from The Age. 26/05/1988

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of our future. Obviously, people must realise development produces employment and growth that allows us to maintain and improve our present standard of living.34

Such measured tones on the dilemmas of development would not have been heard previously from a member of the ‘development at all costs’ National Party government in Queensland. This change of tone occurred because, by 1988, the state government was having to indulge in some quick political footwork to stay ahead in the Japanese investment debate. This was not only because its traditional welcome to all types of foreign investment was starting to cause it political damage, but also because the Fitzgerald Inquiry into police corruption was bringing the whole government into disrepute. Among other things, this inquiry had also revealed that the Bjelke-Petersen government’s unwavering support of the large Japanese property investor may not have always been motivated by a selfless desire to help Queensland development. Evidence was presented to the Fitzgerald Inquiry that in 1986, Shuji Yokoyama, the president of the Daikyo Kanko Corporation, the largest Japanese investor on the Gold Coast, had given a secret donation of $110,000 to the National Party.35 Bjelke-Petersen’s successor as National Party leader and state premier was Mike Ahern. He and his colleagues wanted to lower the temperature of the Gold Coast investment debate by pleading for reasoned discussion of the issues. ‘Japanese investors will boycott Queensland if you, the locals, get paranoid about them. The Japanese control about a third of the financial resources of the Western world. We need foreign investment to develop this state,’ said Mike Ahern while speaking on the Gold Coast.36 His Minister of Tourism, Rob Borbidge, made a point of accepting the invitation of MID Corp. president Tsuneo Sekine to the ground-breaking ceremony of the Royal Pines Resort in Ashmore on the Gold Coast. In his speech Borbidge asked people to ‘put this rather senseless debate about foreign ownership into perspective [because] without foreign investment Australia would suffer a lower standard of living and become an economic backwater’.37 During 1988–89, both Ahern and Borbidge also flew to Japan to assure bankers and developers that their capital would still be welcome in Queensland. The Queensland government argued that much of the hostility to Japanese property investment was based on rumour, fear and ignorance. To allay all three, more factual information was needed

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about the amount of land foreigners actually owned in Queensland. To achieve this, on 7 June 1988, it announced its intention to establish a register of all land owned in Queensland by foreigners. This meant that the Department of Lands would have to be notified of every land transaction involving a foreigner.38 The next day the editorial in Gold Coast Bulletin trumpeted this decision as ‘A victory for people power for the 1500 who attended the protest meeting in Miami Hall’.39 That it no doubt was; but Bruce Whiteside, the organiser of that meeting, was less than impressed. I know for a fact that our meeting that night was what got the foreign land register off the ground, but I’d never wanted that … what we wanted was for the land of Australia that is sacrosanct to stay in Australian hands.40 Queensland politicians may have signalled that they would consider a ban on giving freehold titles to foreigners, but there was no sign of action on this matter. On the other side of the debate, as far as the real estate interests were concerned, the FIRB in Canberra, and now a foreign land register in Brisbane, were already more than enough government interference with the free market in land and property.41 In the eyes of Bruce Whiteside and his supporters, nothing had changed, and the acrimonious public dispute went on. Whiteside continued to issue public statements that had the tone of a populist leader venting his spleen in the face of an aloof, self-seeking political leadership that had lost contact with the ‘real people’. Our all-knowing, wisdom-blessed politicians haven’t got the nous to realise people are genuinely concerned … We are leaving our future in the hands of politicians whose business is preserving their political status and income. A time has got to come when people put the country before personal interests.42 The next year, 1989, was particularly fraught for the National Party government in Brisbane. For, by the middle of 1989, the campaign for the next state election was well and truly on the way. The Leader of the ALP Opposition, Wayne Goss, saw that the foreign investment issue was a very good stick with which to beat an increasingly discredited National Party government. He accused the Nationals of being irresponsible, ignoring the national interest, and pursuing a policy of ‘open slather’ as far as foreign investment in Queensland was concerned. Goss dismissed their policy initiative of the Foreign Land Register by saying that a register did

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not in any way regulate foreign land purchases, it just recorded what had happened. That of course was perfectly true. In a carefully worded statement, Goss committed any government led by him to consultations with the FIRB in Canberra on the possibility of restricting foreigners buying land in Queensland to leasehold titles.43 The fact that this flew in the face of his federal ALP colleagues in power in Canberra did not seem to concern him. In Queensland, an election had to be won in which Japanese investment had become an emotive issue, and that was that. The ALP won the Queensland elections of 2 December 1989. The public did not have to wait long for the National and Labor parties to start repositioning themselves on the foreign investment issue. The National Party, now in opposition had no difficulty in returning to its free enterprise, development-at-all costs ideology. The need to nod towards its alienated anti-Japanese investment supporters on the Gold Coast no longer appeared to be a problem. When the new Labor Treasurer, Keith De Lacy, made a comment six months after the election that ‘Treasury was probing the possibility of leaseholding foreign land purchases, but no conclusion had been reached’, the National Party Opposition Leader, Russell Cooper, blasted him by saying that De Lacy was an embarrassment to his government and should be sacked. Cooper then raised the spectre of a Labor government proposing the de facto socialization of land ownership where an individual or company is not able to sell their property to the highest bidder.44 Removed from the responsibility of office, it was easy once again to deliver such ideological broadsides. On the other hand, as far as Labor was concerned, the electorate did not have to wait long for Goss’ statements on foreign investment to take on a more measured, differentiated tone. Seven months after the election, Goss made a point of addressing the Queensland–Japan Chamber of Commerce on his government’s attitude to foreign investment. He said that all foreign investment was welcome, but his government encouraged value-added investment into areas such as manufacturing and discouraged ‘speculative investment which looks to short-term gain and does not add anything to Queensland’s assets’.45 There was no mention of any restrictions on freehold title to foreign buyers. The Japanese Consul-General, who attended the gathering, replied that he was happy with the points made by the Premier, but asked for further clarification of points such as ‘speculative investment’: What

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exactly did the Queensland government mean by that? He would have to wait a very long time to get an answer.46 Goss kept the Foreign Land Register that had been established by his predecessor, but added his own new bureaucratic structure to it: he established a Foreign Investment Secretariat in the Queensland Treasury. Its function was to analyse the data collected by the Register and publish it on a regular basis. The first of these publications revealed what people who had researched the topic of foreign investment in Queensland had always suspected: the large pastoral holdings owned in Queensland by British and American interests meant that when foreign ownership was measured by area in hectares, the Japanese presence was quite small. However, when foreign-owned land was assessed by its value, then the Japanese came out on top. For 10 hectares of a golf course resort on the Gold Coast was worth much more than 1,000 hectares of a beef cattle property in outback Queensland.47 In the meantime, Wayne Goss continued the practise of his predecessor of flying to Japan to reassure their developers, banks and politicians that Japanese investment in Queensland was as welcome as ever. He also seemed to accept invitations to start, launch or open Japanese hotels, resorts and apartment blocks on the Gold Coast with as much alacrity as Sir Bjelke-Petersen and Mike Ahern had done. On these occasions, his speeches inevitably linked Queensland’s prosperity with foreign investment. On one such occasion, the media showed pictures of Goss beating the ceremonial sake drum with the Japanese Consul-General in Queensland and the president of the Mitsui Corporation to open the Grand Mariner apartment tower in Paradise Waters. He waxed lyrical about the fact that the developers of the Grand Mariner had used ‘enough concrete to build more than 11,000 suburban driveways, enough reinforcing steel to build nearly 5,000 Mazda 121s and 40,000 trees and shrubs used in the landscaping’.48 It was all good stuff for the Queensland economy. When the Labor government was formed in Brisbane after their 2 December 1989 election victory, many in the Gold Coast property industry were worried. However, Alan Hunt of the Rider Hunt Group of valuers and property consultants on the Gold Coast was sanguine. A couple of days after the Labor Party came to power he prophesised that foreign investors were unlikely to be worried by the Goss government.49 Bruce Whiteside said the same thing, but in another tone of voice.

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The unavoidability of the Beirut Look in Surfers Paradise On the Gold Coast itself, the anti-Japanese controversy had not really intruded into local politics. Foreign investment was a matter for higher levels of government, and — quite apart from this — local politics was dominated by people involved in the property and hospitality industries who gave an unqualified welcome to the surge of Japanese visitors and investment capital. The prospect of Japanese investors creating world-class tourist and leisure facilities was something that the Gold Coast City Council (GCCC) was happy to encourage by all means at its disposal. However, by mid1989, it was forced to look at what the Japanese investors had done on the Gold Coast from a different direction. Anybody walking around the central areas of Surfers Paradise could see that the speed of site clearing for new, largely Japanesefunded hotels, apartment buildings and shopping complexes was rarely followed by the arrival of bulldozers and cranes to actually start the building. Business people started to complain that the vacant sites with their tumbledown fences were making parts of Surfers Paradise decidedly ugly and giving it a ‘Beirut look’ (see Chapter 6 for more details). The fear was that this would have a detrimental effect on the tourist trade.50 Council was forced to respond. The GCCC asked its Planning and Development Committee to do a survey of the contentious sites and identify the options for action. This the Committee did and reported that there were 17 hectares of such vacant building sites. The signs of recession in Australia and the sudden credit squeeze in Japan were the main reasons why no building had commenced on them. As far as the Japanese-owned sites went, Council assumed that the FIRB had given them permission to buy on condition that they did not indulge in ‘land banking’, this meant that development had to commence within twelve months of purchase. This was obviously not happening. Council then decided to contact the Executive Member of the FIRB in Canberra to take action to enforce this condition of sale.51 As noted earlier, much of the FIRB’s deliberations were shrouded in secrecy, but the GCCC had assumed that it could force FIRB to act, when in reality it was hard to know what the FIRB could be forced to do or not do. An official of the FIRB made a point of visiting the Gold Coast to hold discussions with the

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mayor, Alderman Gary Baildon. The outcome of these discussions was largely negative. The official was quoted as saying that, with the then downturn of the Gold Coast property cycle, it was understandable that new projects were not being started. Furthermore, the official admitted that the FIRB had no real power to force a foreign owner of a site to start development within the designed time period.52 The GCCC was not satisfied with this response and, for the next year and a half, continued to pressure the FIRB, but with little success.53 In the meantime, it started to negotiate with the owners to get them to spend a little on tidying up the vacant sites, letting them to stallholders taking part in peripatetic markets, and encouraging leases to run mini-golf courses or temporary caryards. This episode showed that the FIRB, the federal government’s main vehicle for managing foreign investment in Australia, had few teeth. No doubt with strong governmental backing its guidelines could have been enforced. However, Canberra chose not to test its dictates against the rigours of the property market and the deregulated forces of globalised capital. This was not surprising. The ALP federal government had deregulated the Australian financial sector and only acted when the surge of capital from Japan appeared to fuel property prices in the politically sensitive domestic housing sector. All the while the prime minister and treasurer made speeches in which they emphasised the continued welcome that Japanese investment in Australia would receive. So Canberra’s repositioning on this issue was ambivalent and strictly limited. In Queensland, the response was more complex. The National Party state government had always welcomed Japanese investment with open arms, but now it had a dilemma because many of the people on the Gold Coast stoking the anti-Japanese fire were traditional National Party voters. Brisbane could not limit itself to deflecting the noise of protest coming from the Gold Coast to those in power in Canberra. Its position was made even more difficult by a general slide in support for the party as it approached a crucial state election with a reinvigorated ALP opposition demanding action. It had to reposition itself on the Japanese investment issue, and do it quickly. So the National Party government started muttering the rhetoric of the Gold Coast anti-Japanese groups, while introducing a measure that did no more than gather and record information on the extent of foreign investment. From its

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position as a harsh critic of the state government, the ALP opposition saw the subterfuge, but once in power itself did little to change it. It repositioned itself as the perceptive evaluator of what was desirable versus undesirable foreign investment in Queensland. In practise little had changed. In the longer term, however, this did not really matter, because within a year or two the flames of antiJapanese feeling were reduced to a flicker and then went out. In 1990 Japan slid into its worst recession since 1945, and so the willingness and ability of its people to buy Gold Coast property was much reduced.

Footnotes 1

2

3

4 5

6

7

8 9

10 11

E. G. Whitlam, The Whitlam Government, Penguin Books, Melbourne, 1985, p. 220. Hon. Ralph Willis MHR, Treasurer, Commonwealth of Australia, speech at: OECD Conference — Cities and the New Global Economy, Melbourne, 21 November 1994. Foreign Investment Review Board (FIRB): Annual Reports, 1978–79 to 1992–3 inclusive, Australian Government Publishing Service, Canberra. The Bulletin, 29 September 1987. Foreigners with Australian residence permits and foreign companies buying property to accommodate their staff could be exempted from these regulations. In July 1991 the 50 per cent limit on sales to foreigners was lifted for new resort projects that won the right to be designated as an ‘Integrated Tourism Resort’. On the Gold Coast three such projects won this exemption: Sanctuary Cove, Royal Pines and Hope Island. F. Chong, ‘Gold Coast buoyant despite Keating’, Business Review Weekly, 9 October 1987, pp. 67–8. Gold Coast Bulletin, 30 September 1987. Based on Gold Coast property sales data from PRD Realty Consulting Services. Foreign Investment Review Board (FIRB): Annual Reports. The rejection rate ranged from a high of 10.57 per cent in 1983–4 to a low of 1.59 per cent in 1986–7.

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14 15

16 17

18 19 20

21 22 23 24 25

26

27 28 29 30

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Gold Coast Bulletin, 29 November 1988 and 29 July 1988. Bruce Whiteside, Convenor, Heart of a Nation. Personal communication, 17 October 1994. Gold Coast Bulletin, 6 October 1987. Ivan Hardman, Executive Officer FIRB. Personal communication, 10 February 1989. The Australian, 26 October 1991. The purchase of a 473 hectare development site by Hokojitsugyo Ltd. at Coomera and a 151 hectare development site that the Co-You Corporation wanted to buy in Currumbin. Gold Coast Bulletin, 9 August 1990; Courier-Mail, 21 September 1990. ABC Newsvoice, 4 July 1988. Many people in the business community, especially those in or allied with the property industry, were critical of Canberra’s balancing act. For example, Gold Coast corporate lawyer Allen Elliott went public and argued for the abolition of the Foreign Investment Review Board. On the one hand he said that with the deregulation of the financial sector, the FIRB had become ‘meaningless’, on the other ‘the reality is that the FIRB is the greatest impediment to the continued flow and growth of foreign investment in Australia’ (Weekend Australian, 6–7 May 1989). It appeared that whichever way the argument was put, the FIRB had to go! The Age, 5 May 1989. The Age, 4 July 1990. Gold Coast Bulletin, 26 February 1990. Gold Coast Bulletin, 12 February 1990. The most controversial were the purchase of Sanctuary Cove by EIE in November 1988, Nippon Shinpan buying into the Mirage Resort Hotels, and the construction by Nikko Securities of a golf course resort exclusively for its staff. Finally, the proposal to site the multifunction polis on the Gold Coast led to a new flare-up of anti-Japanese sentiment. For example, ‘I believe there is growing concern among many Australians about the extent of foreign ownership of Australian freehold property … The question must be asked, and is being asked, “Is the full-scale sell-out to overseas investors in the national interest?”’, (Gold Coast Bulletin, 6 June 1990). Sun-Herald, 4 September 1988. The Age, 8 May 1989. The Weekend Australian, 24–25 February 1990. Sid Spindler, deputy national president of the Australian Democrats, The Age, 30 October 1989. Gold Coast Bulletin, 2 July 1990.

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Foreign Investment Review Board (FIRB): Annual Reports, 1984–5, p. iii; 1986–7, p. iii. Pat Mullins argued that for most of Queensland’s history its politics has been either Left Populist (1910s to 1950s) or Right Populist (1960s to late 1980s). A cause of this has been that Queensland was very much the ‘frontier society’ in relation to New South Wales and Victoria. Hence issues of state development, often being driven by capital from outside over which the local population had little control, fed this feeling of powerlessness and led to an ‘us’ versus ‘them’ attitude. This gave rise to a populist response among state politicians. Mullins defines populism as a form of politics in which various financially and educationally underprivileged groups in society try to overcome their lack of political power by joining forces outside mainstream politics to fight for issues which they feel the established political parties have ignored, or on which they’ve ‘sold out’ to vested interests. (Patrick Mullins, ‘Queensland: Populist politics and development’, in B. Head (ed.), The Politics of Development in Australia, Allen & Unwin, Sydney, 1986, pp. 138–62.) Queensland Legislative Assembly Parliamentary Debates, 19 October 1988, no. 6, p. 1593. The Age, 17 June 1992. Gold Coast Bulletin, 27 January 1989. Gold Coast Bulletin, 17 February 1989. According to the Foreign Ownership Land Register Act (1988–89) ‘foreign’ was defined as all persons who were not Australian citizens, or Australians who had been overseas for more than five years. A ‘foreign holding’ in a company land purchase was defined as an individual foreigner holding at least 15 per cent of ownership by voting rights, or 40 per cent or above as an aggregate of a number of foreigners (Department of Lands, Brisbane). Gold Coast Bulletin, 8 June 1988. Bruce Whiteside, Convenor, Heart of a Nation. Personal communication, 17 October 1994. ‘I am very concerned that Queensland still has long way to go towards restoring our previous excellent relationship with the Japanese. The anti-Japanese feeling that was stirred up earlier this year, and then this foreign land register, has done the state tremendous harm … There has to be a concerted effort to reassure the Japanese that their tourists and investment is welcome in this state,’ said Tony Atkinson of the real estate company Raine & Horne Pty Ltd (Gold Coast Bulletin, 28 October 1988). Gold Coast Bulletin, 13 February 1989. Gold Coast Bulletin, 15 September 1989.

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Gold Coast Bulletin, 27 June 1990. ABC News, Station 774, 7.45 am, 13 July 1990. On the rare occasions when Japanese investors joined in the debate on foreign investment policy, they also asked for clarity and predictability in the guidelines. Bungo Ishizaki of EIE said: ‘The prerogative of a democratically elected government to impose whatever restrictions it deems necessary, for whatever reasons, is something we are in no position to criticise. We just want to know what the guidelines are, so that we can plan ahead.’ (The Australian, 2 July 1990.) US nationals owned 333,262 hectares of land in Queensland, British nationals owned 66,127 hectares, while Japanese owned 24,190 hectares. When stated in terms of value of the land owned, the figures were $98 million (American), $202 million (British) and $1,786 million (Japanese). (Foreign Investment Secretariat, Queensland Treasury, Report on the Foreign Ownership of Land Register, 1990.) Gold Coast Bulletin, 14 November 1991. Gold Coast Bulletin, 6 December 1989. Akira Abe, Managing Director, Japan Travel Bureau, was quoted as saying that tourists may choose to visit Cairns over the Gold Coast because of the ugly development sites and poor landscaping (Courier-Mail, 14 September 1990). Gold Coast City Council Planning and Development Committee, Meeting, 20 June 1989. File ref. no. 100/001/006. Gold Coast Bulletin, 3 July 1989. ‘Council has been working with the FIRB to have development commence on foreign property purchases as soon as it is possible … but there is some difficulty in this.’ Letter to author from N. J. Hodges, Planning and Development Manager, Gold Coast City Council, 12 March 1992.

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Postscript: the bubble bursts

TOKYO, 1994. Workmen were busy scurrying about the steel frame of a half-completed building, but all this activity appeared to have nothing to do with its construction. Instead they were wrapping the steel frame in canvas, rather like a work by the artist called Christo, known for creating artistic Happenings by wrapping famous landmarks. Each girder of the uncompleted steel frame was individually packaged in canvas in the hopes of keeping it from rusting. Far from completion, the building had been abandoned for more than two years. It stood on a small lot of only 100 square metres in front of the Tokyo Dome in the Suidobashi district of the city. This was not the only building wrapped like this, there were many others like it; all relics of the bubble. At this time, not far away, in Minatomachi in the Chuo Ward of Tokyo, the neighbourhood was also characterised by another striking phenomenon: a mosaic of small empty lots in between myriads of two or three storey tenement dwellings. Some lots had double-decked parking devices installed on them, others were just left there. The parked cars at least put the sites to some commercial use. Tokyo was dotted with such empty lots that had been abandoned by speculators when the real estate bubble burst. In the late 1980s, these speculators had bought them from owners at crazy prices, on the assumption that they could on-sell to

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developers putting up offices to cater for the spiralling demand.1 Now that demand had collapsed, as the new, dark, empty high-rise office buildings in many parts of Tokyo attested.2 The signs of real estate collapse extended even to the suburbs. Den’en Chofu, in the southwest of Tokyo, was laid out in the 1920s on English Garden City Movement lines. Since then, it had developed to become one of Tokyo’s most expensive neighbourhoods. Even there the burst property bubble had left its mark, in the form of one or two uncompleted mansions now hidden behind makeshift plywood barriers, and newly created vacant lots half exposed behind the high-quality fences that indicated the solid real estate that had existed on the site before its demolition during the boom.

Why the bubble burst What had happened? A fall in land and property values the like of which Japan had not experienced since 1945. In the four years since values peaked in early 1991 the value of commercial land had declined by 85 per cent, residential land fell by 40 per cent.3 This fall continued right throughout the 1990s. The policy of the banks triggered this turnaround. By the end of 1989, the Bank of Japan was very worried about the speculative and inflationary spiral that its low interest and easy credit policy of the mid-1980s had triggered, so it did a sharp about turn. Whereas between January 1986 and February 1987 the Bank of Japan had halved the official discount rate from 5.0 per cent to 2.5 per cent, it now suddenly reversed its interest rate policy. Between May 1989 and August 1990, it raised the official discount rate five times to move it upwards from 2.5 per cent to 6.0 per cent. Not only did loans become more expensive, but the BofJ was also determined to sharply curtail the amount of lending all together.4 It warned banks against continuing to lend for overseas property investment. In April 1990, the Finance Ministry announced that the amount lent for property development by banks in Japan must grow more slowly than the rate of increase in

Advertisement in the Gold Coast Bulletin of 7 October 1992. Source: Gold Coast Bulletin

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their total loans.5 As by this time all lending had taken a steep dive, this in effect meant that from then on banks lent very little to people in the commercial property industry. The greatly increased difficulty of borrowing money meant that the value of many property deals that had been entered into, in the belief that a financially advantageous development would occur, just collapsed. So land prices fell from one day to the next. The problem for the land owner/potential developer was even more complex than that. Land was often the collateral against which the owner hoped to borrow, therefore the decline of land prices meant that his ability to borrow went down, which in turn limited his scope to fund his desired project. In many cases this made further development impossible. By the end of 1990, the downward spiral had really begun. Japanese banks were estimated to have 59 trillion yen ($A578 billion) in loans to real estate companies and now the reality of bankruptcy had started to hit.6 Interconnected with bank lending policies and the property industry was another financial sector, that of shares and the stock exchange. Speculators had inextricably linked the share and property markets. Property holders borrowed from banks and other financial institutions on the value of their land, to speculate not just on property but also on the stock exchange. So, while the values of land and shares kept rising, they had no difficulty servicing their loan and even being able to borrow ever more, but, when the banks increased interest rates and put a clamp on lending, the downturn on Japanese stock exchanges began with amazing suddenness. From a peak of 38,915 points on 29 December 1989, the Nikkei fell to less than half its boom level in three months — to 18,002 points on 15 March 1990. It continued on a downward trend for over the next decade, bottoming on 7 March 2003 at 7,601 points.7 The 1980s lending binge of the Japanese banks was followed by a financial hangover of gigantic proportions that put them in a state of financial paralysis, which in turn made it difficult for the Japanese economy to commence a sustained recovery. After 1990, this made the position of the banks the basic problem in Japan’s inability to throw off the aftermath of the 1980s economic bubble, and that position was not good. In the eyes of foreign observers Japanese banking had become synonymous with crisis, cronyism, backroom dealing, sclerotic decision-making and mismanagement. During the 1990s, estimates were published at

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frequent intervals of the total amount of bad debts that Japanese banks and other financial institutions were carrying. The most authoritative figure was given by the government agency JETRO in 1995 and that was 40 trillion yen, or $A665 billion.8 This huge sum made the overall financial position of some banks decidedly shaky. As the decade continued, Japan’s bad loan crisis went on and on. For, unlike Western banks, in Japan banks were generally unwilling to take over as a receiver to dispose of their debtors’ assets. Instead they sought to exercise influence, or at best indirect control over their clients in financial difficulties. As a rule, they preferred to let their borrower sell his property assets himself and so try to service his loan as much as he possibly could. In some cases the bank even ‘threw good money after bad’ by continuing to give an important client financial support well after a declaration of bankruptcy would have been the only feasible option. There was an issue of Japanese business culture here that inhibited action: sometimes the business relationship between banker and client also became a personal relationship, and the bank may also have owned shares in the client’s company. Hence, any drastic decision by the bank would involve a loss of face all round. Economist Keiichiro Kobayashi put it succinctly when he wrote that: The message conveyed by Japan’s response to the bad loan problem over the past decade was that the Japanese will go to just about any length to avoid accepting responsibility for the consequences of their own voluntary actions.9 These huge frozen bad loans meant that banks were not lending for new projects; this, in turn, retarded overall investment in Japan and so made economic revival during the 1990s very difficult.10 Land and property values continued in their downward spiral, with the projects of the bubble economy being particularly severely hit. Golf course resorts were a prime example of this. During the bubble years, building a golf club seemed like a licence to print money. But now, with the ongoing recession, companies were no longer willing to buy expensive golf club memberships for their senior staff, which in turn reduced the tradeable value of the memberships that were sold during the boom years. The golf clubs and resorts were also hit by a clause in the membership purchase contract that many overlooked when the value of memberships was rising higher and higher: the golf club committed itself to refund the purchase price after a certain period,

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usually 10 years. By the mid-1990s, more and more people were keen to be rid of an investment whose value was going down and down.11 The result was that by 1996 the golf clubs were being hit by IOUs of Y300 billion.12 Most could not pay, or had to enter schemes of financial rescheduling. Not only that, many golf club projects were also in debt to banks or other financial institutions for loans, which, coupled with the sale of memberships, had funded their whole development. These loans were among the huge bad loan burden the Japanese banks were carrying. It is therefore not surprising that from the early 90s onwards there was a steady stream of golf club and golf course resort company bankruptcies.13

The high flyers of the property boom crash-land The fate of the most flamboyant Japanese investor on the Gold Coast showed that when boom turned to bust even the most stellar entrepreneurial career crashed back to earth. As Richard McGregor commented, ‘For a symbol of the bursting of Japan’s financial bubble, and its fallout over smaller countries like Australia, you need look no further than the disgraced Tokyo businessman’.14 The name of that businessman was Harunori Takahashi (see Chapter 3 for more details). On the 27th of June 1995, the readers of Japan’s mass dailies picked up their newspaper to find a mug shot of a dishevelled Harunori Takahashi staring at them from the front page. The accompanying headline in the English edition of the Yomiuri Shimbun, the Daily Yomiuri, announced, ‘Four execs arrested in credit union scandal probe’. For, on that day, Takahashi, president of the Tokyo Kyowa Credit Union Corporation, and three colleagues were arrested on ‘breach of trust charges’ in relation to the collapse of this credit union.15 Takahashi’s world of jetting around the Pacific basin in the quest to buy more and more tourism properties had crashed around him. The buying binge was over and all that was left were a huge pile of debts. These were variously estimated at between $A9 to 11 billion.16 Since 1984, Takahashi had been president of the Tokyo Kyowa Credit Union Corporation, and in December 1994 it went bankrupt. A few weeks later the governor of the Bank of Japan (BofJ) stated publicly that the BofJ would not automatically prop up institutions that had lent rashly during the bubble boom. Everyone assumed that that was that.

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However, in February 1995, the Finance Ministry announced a largely taxpayer-funded rescue package for the Tokyo Kyowa Credit Union. The media and many voters were furious. ‘This is not a crisis for the credit union industry. It is a private crisis for Takahashi and there is no case for using public moneys to help him solve it,’ fumed the conservative Yomiuri Shimbun.17 Public anger rose even further when two facts about the Tokyo Kyowa Credit Union Corporation collapse became widely known. Firstly, Takahashi and a friend, Shinsuke Suzuki, president of the associated Anzen Credit Bank, had been milking these credit unions of funds for their own business purposes. As far as Takahashi was concerned, he had been able to get $A1.26 billion in illegal loans from the Toyko Kyowa Credit Union Corporation to cover some of his mounting interest payments on the debts of his companies. Quite apart from the morality of the president getting such a huge loan from his own financial institution, the size of the loan contravened the regulation that a credit union in Japan is not permitted to lend more than 20 per cent of its total capital to one borrower. Takahashi had borrowed 80 per cent of the Tokyo Kyowa Credit Union Corporation’s funds. Secondly, the web of nepotism and corruption that Takahashi had woven to further the funding of his burgeoning international property empire gradually became apparent, and the now bankrupt credit union was at the centre of it. Takahashi had helped a number of politicians get loans of dubious legality from his credit union, quite apart from which key civil servants in the Finance Ministry, who had a role in the surprise rescue package being proposed for the credit union, had been beneficiaries of Takahashi’s hospitality and largesse. Details of free trips in Takahashi’s private jet to Hong Kong and the Gold Coast were revealed, as were the dining, wining and gambling exploits in these and other places.18 A politician, Keisuke Nakanishi, one of the Gold Coast junketeers, had received $A800,000 from Takahashi for his re-election campaign, and the corrupt former prime minister, Kakuei Tanaka, was revealed as being one of the largest customers of the credit union.19 People were demanding to know who else the bail-out was designed to benefit, and to protect. Takahashi’s most important lender during the bubble years had been the Long-Term Credit Bank of Japan (LTCB). The amount he had evidently borrowed from the LTCB exceeded $A6 billion.

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During that period the LTCB was headed by Morihisa Ishida, the cousin of Takahashi’s father. Now, in the rescue package being mooted for the Toyko Kyowa Credit Union Corporation, the LTCB was identified as contributing $A267 million.20 The irony was that the financial situation of the LTCB itself was moving in tandem with that of Takahashi. Takahashi had financial and personal connections to the LTCB from the beginning of his international property-buying spree, so among all of the Japanese ‘blue-chip’ banks that lent money to his company EIE, the LTCB was by far the most important.21 However, by the beginning of 1991, there were signs that Takahashi’s creditor banks were starting to be uneasy about his company’s high levels of debt. Takahashi at this stage was still confident that the property market would quickly ‘right itself’ and, furthermore, that he could always trade his way out of his financial difficulties. In a gesture of generosity that in retrospect appears naïve if not foolhardy, in April 1991 his banks approved a request from EIE to suspend interest payments for three years on half of its debt, while EIE would attempt to sell some of its overseas properties. The fact that the property market in the United States, Australia and elsewhere was by this time in recession made this promise worth relatively little. The banks also agreed to extend another 100 billion yen ($A917 million) in emergency finance to keep EIE going.22 It was soon apparent that this had only postponed the day of reckoning. With EIE’s very high level of debt it would have been relatively easy for any one of the banks to send EIE into actual bankruptcy, but in Japanese business culture that would have required consensus among the lenders, so at this stage they took the easy option. There was also the question of ‘face’. If the banks took over control of EIE that would be tantamount to an admission that they had made bad judgements in the past about lending Takahashi’s company the large sums of money in the first place. The banks were not willing to take this step yet. Help now given and a quiet monitoring role were seen as saving face on both sides. By 1993, however, EIE’s financial situation had worsened to the extent that the creditors were forced to pay the overheads for investments such as Sanctuary Cove and the Bond University on the Gold Coast. In July 1993, LTCB finally stepped in. It did not seek to be declared the receiver of EIE, as would have been the case in that situation in Australia, but announced that it ‘would

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withdraw support’ from EIE. LTCB appointed a partner in the Brisbane office of solicitors Feez Ruthning to act for them at Sanctuary Cove and Bond University.23 Takahashi had been carried for a long time by banks that were more accommodating to him than anyone thought realistic, but now he was effectively sidelined. He went public and lamented that, ‘I’m a bird in a cage. I can’t even talk to press people unless I get permission’. However, the events already described showed that he was able to continue his financial manipulations for another two years. In the meantime the financial situation of his major backer, the LTCB, was also becoming more precarious. EIE was not the only speculative company it had supported during the late 1980s, and so, with the bursting of the bubble and a lot of non-performing loans on its books, it was facing the spectre of its own demise. It had debts of 1.5 trillion yen ($A18.9 billion). Among its borrowers was the balladeer Masao Sen (see Chapter 4 for details). Sen had borrowed close to $A100 million from the LTCB to invest in Australian property ventures that proved to be unsuccessful. His connection to the LTCB did not exactly increase his popularity, so by the late 1990s his public singing appearances had become quite infrequent. He was supposedly bunkered down in his luxury Tokyo mansion. In turn, making such ill-judged loans to inexperienced property speculators such as Masao Sen did not help the image of the LTCB. By the middle of 1998, it was an open secret that the LTCB would either have to merge with one or other bank, or it would collapse.24 At this stage the tight networks between bankers and politicians in Japan appeared to play a decisive role in the fate of the bank. After lengthy negotiations between the LTCB and the government, as well as between the government and opposition, an announcement was made on 19 September 1998. The LTCB was to be nationalised and the property assets of its defaulted debtors sold off, though the Japanese government held open the possibility of the bank’s resale to private interests at some future date. This occurred within 18 months, when a syndicate led by the US Ripplewood Holdings bought a controlling interest in the LTCB for the modest sum of $A14.8 million.25 This enabled an American company to do that which on previous occasions the Japanese government would have done anything to prevent, namely, to buy a Japanese bank. The national hubris of Japan in the 1980s had well and truly disappeared.

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It was in this context that an announcement made in Sydney on the 19th of November 2001 has to be seen. This said that the Japanese Government Resolution and Collection Agency had sold the Sanctuary Cove resort to the Malaysian company Mulpha International for $208 million.26 During the decade prior to its sale, Sanctuary Cove had shared many of the twists and turns in the fortunes of its owner Harunori Takahashi. After the initial burst of investment in Sanctuary Cove, the recession beginning in 1990, as well as the increasingly acute liquidity problems of EIE, meant that the company did not invest much more in the further development of the resort. The flow of Japanese buyers became a trickle, and the property slump on the Gold Coast meant the local buyers also showed little interest in such upmarket properties.27 Management at Sanctuary Cove was confronted with the dilemma that head office in Tokyo was not sending them any investment funds, yet sales on the ground were few and far between, so they had little capital with which to continue the development of the resort. Over one-third of the houses built by EIE between 1988 and 1991 were waiting to be sold.28 A dramatic gesture was called for. At the beginning of 1988, Sanctuary Cove was launched with an Ultimate Opening, now its fortunes would be revived with an Ultimate Auction. ‘We are throwing down the gauntlet and asking the Australian public to tell us what they think our homes are worth on today’s market,’ said Sanctuary Cove’s director of development Bob Roche.29 The big day of the Ultimate Auction was the 30th of August 1992. Bidders were there by invitation only, and not only many of Gold Coast prominence but also members of the Sydney glitterati. One could spot sitting in the auction marquee the local hairdressing celebrity Stefan Ackerie as well as local identity Anslie Gotto. From Sydney came socialite Sonia McMahon and advertising executive John Singleton. There were nearly a thousand people there, including many from Asia who had flown in for the occasion. The idea of this novel auction was that each property had two prices, the listed price and a limited bid price. The latter was anything between 30 and 54 per cent lower than the listed price. If there was only one bidder then they would get the property for the lower limited bid price.30 As the auction proceeded the flamboyant staff of the auctioneer circulated among the bidders trying to hype

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them up to bid against each other. Successful buyers were presented with a bottle of Moët champagne and then whisked away to the country clubhouse in a golf cart to sign the contract of sale. The result was a success. All the 66 homes and blocks of land were sold and Sanctuary Cove netted $30.4 million. However, these properties had been previously on the market for a sum total of $50 million; this showed that only the limited bid price was paid by many of the people at the auction, and they got genuine bargains.31 About a third of the sales were to Asian buyers, with the largest number coming from Taiwan and Hong Kong. Buyers from Japan were in a distant third spot. This was another sign that money was no longer flowing as freely from Japan as it had only three or four years earlier. The funds raised at the Ultimate Auction did enable the management of Sanctuary Cove to restart development of the resort, albeit at a much slower pace than originally intended. After mid-1993 it in effect became the property of the LTCB, and there it lingered until the Japanese government divested the LTCB of it at the time of the banks’ nationalization. As already mentioned, in 2001 Sanctuary Cove was sold to Malaysian interests. And what of its original owner Mike Gore? After he sold Sanctuary Cove, Gore moved to a farm in the Gold Coast hinterland and attempted to start new property ventures. In May 1992 he and his third wife Karen flew out to live in Canada, leaving behind debts of over $25 million. Mike Gore died in Vancouver on

The Ultimate Auction at Sanctuary Cove on 30 August 1992. Source: Gold Coast Bulletin

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18 December 1994, aged 53. Gore had led the ‘Joh for Canberra Campaign’ in 1987, so it is appropriate to let his great political friend Sir Joh Bjelke-Petersen have the last say about him: ‘He lived life hard and with a great deal of enthusiasm and his sudden death makes us realise that material things don’t mean anything. It shows us how important it is to believe in God.’32 Sanctuary Cove survived the Japanese financial meltdown and personal scandals of its owner, but some other Gold Coast golf resorts did not. It is revealing to look at two of them in some detail: Sapphire Lakes and Hope Island. One went down before it even started, while the other was reduced in style to become a much more modest venture than the original grand plans that had been envisaged for it. The Sapphire Lakes resort, planned for a site in Mudgeeraba, got as far as the earthworks. Its owner was sharebroker Mitsuhiro Kotani, whose company, Koshin Australia, in 1988–89 went on a $90.3 million property buying spree on the Gold Coast. However, his plans did not get very far. For, in early 1991, Kotani and his business colleague, Hirotomo Takei, were under investigation for large-scale tax evasion and share manipulation during the bubble years on the Tokyo stock exchange. In May 1991, they were taken into custody and charges were laid in which the prosecutors alleged that Takei gave Kotani $A878 million in loans and received inside information on the stock market in return.33 Subsequently Kotani’s Gold Coast properties were liquidated in the middle of the recession. They fetched only $34.5 million, a third of what Kotani had paid for them four years earlier.34 The Hope Island golf course resort being developed by the Shinko Corporation of Osaka also suffered through the economic downturn. The fortunes of its chairman, Shigeru Isutani, were very much made through the speculative golf course ventures of the bubble economy. After the property bubble burst, Shinko Corporation was dependent largely on the income of casual golfers using its nine courses in Japan. When the banks stopped lending to the Shinko Corporation and the saleable value of golf club memberships collapsed after 1990, the flow of investment capital to the Hope Island project slowed to a trickle. The luxurious golf course and clubhouse, which were completed first, were to be followed quickly by the development of a 400 room, five-star hotel and 1,500 homes. But in 1992, three years after the completion of

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the golf course, there were still only 36 homes under construction. A spokesperson for the company, however, commented valiantly, ‘It’s a fact that construction has been delayed, but we will never abandon this project’.35 By 1994, another couple of dozen of homes were being built in two neighbourhoods, but not a sod had been turned for the hotel.36 From March 1993 onwards, head office in Osaka ceased funding its Hope Island project. The local subsidiary company was now dependent for its funds on the sale of the relatively small number of houses that it had already built, profits from the usage of its golf course, and the sale to local builders of small parcels of land from its 368 hectare site. In the meantime, the image of the whole Hope Island project was not helped by information which Australian news teams had ferreted out about the Shinko Corporation in Japan. The brother of Shigeru Isutani, Minoru, was suspected of having Yakuza connections. During the 1980s the Japanese Mafia, the Yakuza, was known to have entered some of the speculative ventures of the bubble economy. Furthermore, Minoru was under investigation by Japanese authorities for ‘financial irregularities’. In a TV interview in Japan, Shigeru admitted that his brother was a Shinko Corporation director, but claimed that this was ‘in name only’. However, the Australian TV team found records that showed that Minoru Isutani owned 40,000 shares in Shinko Australia.37 For the rest of the 1990s, Hope Island lingered on under Shinko Corporation ownership. Some development occured, usually in partnership with local companies. Shinko Corporation had the land and the partner had the capital.38 The end of the Japanese Hope Island story occurred in 2000. By that time, the Gold Coast property market was again on the up and new housing estates had started to spread around the Hope Island site. It was no longer the isolated area that it had been a decade earlier. Australian property tycoon Lang Walker saw the new potential in the Gold Coast market, especially at the northern end of the city, and bought Hope Island for $40 million. This was after Shinko Corporation had spent $220 million on a lavish canal system, top of the range golf course, luxurious clubhouse and some sections of the housing estate. It was indeed a bargain.39 The largest Japanese investor on the Gold Coast was Shuji Yokoyama and his Daikyo Kanko Corporation. The corporation was not a bubble economy enterprise, but a well-established home

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building company, but even it could not escape the rigours of the credit squeeze and the Japanese recession of the 1990s. In 1992 the head of its overseas division, Hiroshi Kanagawa, used homespun language to spell out Daikyo Kanko Corporation’s predicament: When the winter comes, the best thing to do is to buy a heavy coat. Now is not the time to attack — it’s a time for defence. In the past we could start lots of projects at one time. Now the time comes to save the project.40 Gone were the days of lavish hotel openings, junkets at the company’s expense, grand resort schemes, and generous sponsorships of sporting events. By 1992 in Japan, Daikyo Kanko Corporation’s core business in condominiums or apartments was bleeding profusely: only about four out of ten of their apartments were finding buyers, and its hotels and golf course ventures were also hit. Profits at home evaporated rapidly, and its tourist/leisure properties in the United States and Australia were often still at the development stage and also suffering from the economic downturn in their countries. The dive in its cash flow made it difficult for Daikyo Kanko Corporation to service its debt to the banks, and the company was increasingly under the pressure of the banks to produce payments.41 This change in fortunes was quickly reflected in the price of Daikyo Kanko Corporation’s shares on the Tokyo stock exchange — from a peak of 6,510 yen on 10 November 1989, they crashed to 492 yen on 28 July 1992 before rising to over 700 yen in October of that year.42 However, during the year that followed, they moved only around the 500 yen mark. No significant recovery in their values would occur until well into 1994.43 In 1993, Daikyo Kanko Corporation recorded its first loss in 30 years.44 Something had to be done by Daikyo Kanko Corporation to respond to its financial plight. Its response was drastic. The Tokyo economic daily, Nihon Keizai Shimbun, spelt out the restructuring operations that the company had decided to undertake. These involved staff cuts, discounting of apartment prices, and asset sales, both at home and overseas.45 The last transfer of investment funds from head office in Tokyo to Daikyo Australia occurred at the end of 1991. From then on, the Australian operations had to be financially self-sufficient. As many of its projects in Cairns and on the Gold Coast were at the development or even just the planning stage, this was a serious financial blow to their business plan.

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On the Gold Coast, all planning for buildings on Daikyo Australia’s empty sites in Surfers Paradise stopped. So, in the next couple of years, the company’s contribution to the area’s Beirut look was quite significant. There were rumours of the sale of its flagship, the Gold Coast International Hotel, but in 1994 these were denied by its executive director, Sir Sydney Schubert.46 At its Palm Meadows golf course resort in Carrara little further home building could be funded by Daikyo Australia. The sponsorship of the Palm Meadows Cup, the Gold Coast Indy Car Grand Prix and the Australian Ladies Masters Golf Championship ceased, and the golfer Greg Norman’s $1 million contract was cancelled.47 In 1996, the dismemberment of Yokoyama’s prise golf resort project began. Sections of the 330 hectare Palm Meadows site were sold to developers. In this way home building recommenced and the hotel, a key feature of Daikyo Australia’s plan for a luxury resort, was built, albeit in a smaller, more modest version.48 Finally, in May 1996 the sale of the golf course, clubhouse and all bar 10 hectares of Palm Meadows was announced. The price was $50 million and the buyer was the Hong Kong casino tycoon Stanley Ho. He had already purchased other properties on the Gold Coast and was planning to live for part of the year in a house he had built on Cronin Island, very close to the mansion that Shuji Yokoyama had constructed for himself 10 years earlier.49 However, Shuji Yokoyama and Stanley Ho were not neighbours for long. In 1997, Yokoyama sold his Cronin Island mansion for $6.55 million, a loss of more than one and a half million dollars on what he had spent on it in the late 1980s.50 At the turn of the century Daikyo Kanko Corporation’s presence on the Gold Coast was much smaller than at the end of the previous decade, but it still had one. It still owned office buildings and development sites in Surfers Paradise which had great potential, and retained some land at Palm Meadows. Signs of an upturn in the Gold Coast property cycle after 2000 encouraged the corporation to re-enter the market. Gone was the flamboyance, gone was the publicity, gone were the grand, unilateral schemes of the 1980s. The projects were tightly budgeted, and the larger one was in partnership with an Australian company. In May 2001, Daikyo Kanko Corporation announced a project of 135 houses and townhouses on the land it still owned at Palm Meadows.51 By the standards of its 1980s ventures, this was a

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modest $32 million proposal, but one that would give it a cash flow over a short, predictable period. A little under two years later Daikyo Kanko Corporation took the plunge into a larger venture, but in partnership with the large, established Australian property firm of Lend Lease Development.52 This was no grand solitary venture on the part of the corporation. It was a response to a study of the local market that showed the time was opportune to move, and it was to be undertaken together with a company with large capital resources. The corporation’s key asset was its development sites in Surfers Paradise and Lend Lease Development gave the venture the access to large funding. Twelve high-rise apartment towers were to be built on the land, with the pace of construction being staggered according to the speed at which they could be sold. Daikyo Kanko Corporation had survived, but had got its fingers severely burnt in the financial conflagration that had engulfed it in both Japan and Australia. What emerged was a much more modest and cautious developer using assets that it was able to retain after much else had to be offloaded. The corporation’s experience on the Gold Coast was shared by many other Japanese investors on the Gold Coast. It is interesting to look at the fortunes of the major Japanese investors on the Gold Coast in a general overview.

An overview of the fate of Gold Coast Japanese investors The table in Chapter 4 listed 90 major Japanese investors on the Gold Coast. It is revealing to look at the fate of these investors 10 years after many of them first arrived on the Gold Coast. By this time, the Japanese bubble economy euphoria was well and truly over and both Japan and Australia were in an economic recession, so the table below gives a snapshot of the Japanese property scene on the Gold Coast at the end of their investment spree. Still own the property purchased or developed, completed project according to the original plan Still involved with property, but scaled down project, or developing it in slower stages Still own property, but development not commenced yet Property on the market Property sold by owner or mortgagee

33

Total

90

15 6 8 28

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Thirty-three — or only a little over a third — of these 90 investments proceeded as intended by their owners. Their success despite the economic turbulence of the period can be explained in a variety of ways. Some were companies not in the property business but in some other activity, and their property project on the Gold Coast was to help their core business expand, so they were much less affected by the bursting of the property bubble in Japan. The Crooked House Restaurant bought by Aldo Star in Surfers Paradise was of this type, as was the purchase by the Traveler Corporation of the duty-free shop in the Forum Centre in the main tourist shopping strip of the Gold Coast. Related to these were projects developed by companies for their own use, like the company retreat built by Nikko Securities at Merrimac. Other Japanese investors who were able to achieve their original aims were those who did not rely on huge bank loans and made relatively modest investments that gave them an immediate cash flow. They usually bought a small office building, shopping arcade or industrial property (Tormi Asano, Takao Haneda, Nishizu Australia). A couple of family companies achieved success in the hotel/resort market as well. The Yodogawa Kanko Development Company and its purchase of the Ocean Blue Resort in Surfers Paradise has been such a success story. Larger investors who cast a careful eye over the Gold Coast market, took advice, or entered a partnership with an Australian business often fared well. The housing project of Big Arrow Enterprises, the hotel and golf course of Nara Holdings, and the Sundai Group hotel are examples of this. But all these amount to about a third of the total of major Japanese investors. Not a resoundingly positive result all round. There were 15 Japanese investors who, in 1996, were still involved with their project but had to scale down, extend the timeframe of development or stay in a holding position. Included among these were a few already discussed in some detail (EIE and Daikyo Kanko Corporation), as well as others who had embarked on large projects that were hit by the credit restrictions in Japan and the property downturn on the Gold Coast. MID Corp.’s Royal Pines Resort, and the luxury high-rise apartment buildings Silverpoint, Belle Maison, and Grand Mariner come to mind. In the case of the last two, only substantial discounting of the original price enabled their owners to clear the backlog of unsold

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apartments.53 Maruko Corporation was instructed by its creditor banks to sell Rivage Royale to Daiei, Japan’s second-largest supermarket chain.54 This enabled the Rivage Royale to be completed, and Chizuko Nakandakari was given leeway to sell all the apartments at their original set prices. The third group of Japanese investors were those who still owned their sites but even after a number of years had not begun to develop them. Changed economic circumstances back home and on the Gold Coast was the fundamental explanation for this. Sometimes this hid a deeper truth: they had realised that the project they had originally planned was too big and too lavish for the Gold Coast market. In 1996, they still hung on, hoping for better times, or not being able to confront their misjudgement at having paid a boom-time price for land that was to be the site for a hotel, shops or apartments whose economic viability was doubtful from the beginning. The situation Jimna found itself in, with its big piece of vacant land in the centre of Surfers Paradise, is the best example of this predicament. Then there were those eight investors who had admitted their mistake, or whose creditors were forcing them to sell. There was often a pushing and pulling process going on here, with banks in Japan wanting interest payments, if not the repayment of as much as possible of the original loan, and the investor on the Gold Coast trying to hold on as long as possible in the hope of getting a better price in a flat market. The high-rise apartment projects of the Ashizawa Contracting Company and the Anabuki Construction Corporation show this at its best. Plans for their projects were drawn and building was ready to go when the banks withdrew support, and so eventually forced these two companies to abort their schemes, cut their losses and put their sites on the market. The final group were those who, by 1996, had already cut their losses and left the Gold Coast. Some of these were the pure bubble economy speculators who had just extended their speculative activities to the Gold Coast or who sought prestige and status in Japan by acquiring assets overseas. They were the first to go under when the bubble burst. The prime case was the Koshin Company, but the developers Pacific Atlas and Yamashin Australia were also of this type. They had hardly had their sites in Main Beach, Surfers Paradise and Broadbeach cleared for building when their financial lifelines from Japan were cut, and they crashed. Most of these Gold

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Coast sites were then picked up at bargain prices by local individuals and companies.55 Eikichi Yazawa, the pop star, also saw his Gold Coast investment ventures crash. His grand schemes for state-of-art sound studios and such came to nought as his properties were sold at a great loss in 1993, and his company the Comestock Corporation was wound up in April 1995. These ventures had been managed by his friend the professional tennis player, Hiromu (Henry) Kawada, and their friendship did not survive this financial disaster. It led to a five-year court case that was not resolved until January 2003. Kawada pleaded guilty to 16 charges including false pretences, misappropriation and forgery.56 It is untrue to label all those 28 Japanese investors who by 1996 had cut their losses and left the Gold Coast as pure speculators. Some were well-established companies back home, but they had spread into foreign ventures too fast, had diversified out of their core business and, when the credit squeeze and recession came, had to shed overseas assets and consolidate their activities at their home base in Japan. The K. K. Alpha Corporation found itself in this situation, it threw out all its grand plans for Ephraim Island in the Broadwater of the Gold Coast and, in December 1995, sold the island at a substantial loss. Other examples of investors who went through this process were the established building/developer companies of Towa Kohmuten Corporation and Wacore and Cedric. They all had their own experiences as boom went to bust, but in their stories a pattern could be seen. What is striking is that, by 1996, nearly as many had cut their losses and left as had completed their projects according to their original plans. Only about a third of the Japanese projects were completed without glitches, and many more than that were scaled down, postponed or abandoned altogether. Thus large-scale Japanese property investment on the Gold Coast cannot be said to have been a success story. A very expensive learning experience for the Japanese involved would be a more appropriate way of describing it.

Conclusion The Japanese had learnt throughout their long history on their mountainous island home how to manage poverty, but the need to manage wealth was completely new for them. When the affluence of their strong yen suddenly hit them in the 1980s many of them

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were bowled over by overconfidence, if not hubris. They fell into the dangerous belief that the good times of easy credit and rising land values would continue forever. Until 1990, the Japanese had had no experience of volatile property markets in Japan, whereas the Gold Coast had been built on them. Their banks had made borrowing seemingly infinite amounts of money an effortless pastime, yet these banks had no experience in lending for overseas property. They came to the Gold Coast filled with a belief in their own business invincibility. They saw the place as another Hawai’i or California just waiting to get luxurious tourist/leisure facilities that would be patronised or bought by a global clientele, and especially by their free-spending fellow Japanese. They came to the Gold Coast with the strong yen in their pockets and the enthusiastic support of the Japanese banks behind them. They came from a Japan where property was skyrocketing in price to a Gold Coast where it seemed to them to be incredibly cheap. The result was that, when they set their eyes on a development site, hotel or resort, they did not bargain, they did not negotiate, they just paid. They seemed to enter a competitive race among themselves to buy or build the most prestigious and the most luxurious property asset to gain status and access to networks back home in Japan. The Gold Coast real estate fraternity had never seen anything like it. They were amazed, worked hard, and pocketed their fees and commissions. In retrospect, they judged their Japanese clients to have grossly over-estimated the size of the Gold Coast market for five-star hotel rooms, designer-label shops, luxury apartments, expensive houses and luxurious golf courses. When the money from Japan stopped flowing and the Gold Coast property cycle did what it had always done — that is, take a deep dive — the local agents and property consultants continued to be perplexed by the reaction of the Japanese investors in their midst. During the boom, the Japanese had ignored local market research and cost-benefit studies and just went ahead and spent regardless; now, during the bust, many of them were slow at doing what Gold Coast property people thought was natural — liquidate and cut losses as quickly as possible. But, then, this was just another of the many cultural differences that saw the coming together of Japanese investors and the Gold Coast property elite produce such an array of fascinating twists, turns and misunderstandings.

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As most of the Japanese developers withdrew from the Gold Coast during the 1990s, so did their staff. Local company representatives, consultants, financial advisors and site managers went back to Japan, with the result that the Japanese community on the Gold Coast got smaller. However, while many of the people involved with development projects returned to Japan, there were still Japanese who worked in the hotels, duty-free shops and restaurants patronised by tourists from their homeland. Also, the lure of Gold Coast space, sunshine and the relaxed lifestyle remained. So, the trickle of financially independent retirees from Japan continued. They came to live on the Gold Coast, a few hundred every year, to buy a home and enjoy a better lifestyle than what their savings could give them back in Japan. The need to reapply for a residence permit every four years was an inconvenience they were willing to accept for the sake of a life that gave them easy access to a golf course, beautiful coastal scenery, and a relaxed environment free from the stresses and strains of an overcrowded Japan. As a result, a modest flow of Japanese investment into Gold Coast real estate has continued, but the large projects of the 1980s were history.57 At a personal level, the conservative Gold Coast community accepted the Japanese people living in their midst, but a few years earlier in the late 1980s, when the media headlines were emblazoned with the huge sums Japanese companies had paid for choice pieces of Gold Coast land, the sound of the word ‘Japanese’ struck a long latent nervous chord in many of them. This occurred precisely at a time when Canberra was vocal in encapsulating its refocused foreign policy under the slogan ‘Australia is a part of Asia’. The older, overwhelmingly Anglo-Celtic Gold Coast community saw the huge dollops of Japanese money as the immediate outcome of this slogan, and there was one thing of which they were sure: they did not want it. Such people did not see money and people moving freely from one country to another as a welcome sign of a globalised, cosmopolitan world, but as a threat to Australians and their ownership of their continent. In one sense this showed that issues of foreign investment are not just a matter of financial debits and credits. Investment capital is brought by people, therefore the cultural baggage they bring with them becomes part of the investment equation, and the locals may react to these new arrivals in a very emotive way.

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The arrival of the Japanese on the Gold Coast brought to a crisis questions of Australian national identity in a rapidly changing world. Australia has always been highly dependent on foreign capital, and governments have argued its benefits for all Australians. While it came exclusively from Britain, and even when it largely came from the United States, the cultural baggage of its bearers was quite familiar to most Australians. However, the sudden flood of people and capital from a country with a very different culture was another matter, particularly when it was concentrated in one Australian city, as Japanese capital was in the 1980s. There is perhaps a pointer in this to the future. For, in the years to come, Australian society is likely to face the strains between, on the one hand, being drawn into an Asian orbit and, on the other, some of its people wanting to remain closely aligned with a Western, if not Anglophone world. The arrival of the Japanese in the 1980s was perhaps an early sign of the tensions that exist in Australia between these two poles of attraction.

Footnotes 1

2

3 4

Between 1984 and 1991 the amount of office space in Japan’s three largest cities, Tokyo, Osaka and Nagoya, had doubled. Kikuo Arai, ‘Empty Office Buildings Galore as the “Land Myth” Collapses’, Pacific Friend, vol. 22, no. 1, May 1994, pp. 2–9. The Australian, 13 July 1995. For example, the Ministry of Finance severely chastised the Sumitomo Bank for its profligate lending to property speculators. By 1991 this had given the bank more than $A10 billion in bad debts. Its most publicised client was the textiles trading company the Itoman Corporation, which went on a property speculation orgy in Japan and overseas. It all ended in scandal when associations between Itoman, the Osaka underworld and some prominent politicians came to light, a situation that Sumitomo had apparently done nothing to prevent (C. Wood, The Bubble Economy: The Japanese Collapse, Sidgwick & Jackson, London, 1992, pp. 133–39; Courier-Mail, 22 February 1991; The Age, 30 January 1995).

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6

7

8

9

10

11

12

13

14

15

16 17 18

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Toru Takanarita, ‘Shaking the Financial System’, Japan Quarterly, vol. xliii, no. 2, April–June 1996, pp. 126–32; Chief economist, Dominiguez Barry Samuel Montagu, quoted in The Australian, 29 September 1990; Nobuyuki Saji, economist, Nikko Securities Co., quoted in Gold Coast Bulletin, 19 November 1990. Figure for March 1992, in Australian Business Monthly, May 1992, p. 58. There were small rises in the Nikkei index in 1994, 1996 and 2000, but these were no more than interruptions to the downward spiral that continued till early 2003. JETRO is the Japan External Trade Organization. The estimate was quoted from the JETRO publication Focus Japan, July/August 1995, p. 4. Other estimates were Y35 trillion and Y27.9 trillion. However, in January 1998 the Ministry of Finance revealed that under revised reporting standards the bad loans being carried by banks and other financial institutions in Japan were estimated to total Y76.7 trillion ($A913 billion). (The Australian, 13 January 1998.) Keiichiro Kobayashi, ‘Bad-Loan Disposal as a Moral Issue’, Japan Echo, vol. 30, no. 1, February 2003, pp. 33–35. Another reason for the generally stagnant Japanese economy during the decade after 1991 was poor consumer confidence reflected in high rates of saving and low levels of spending. By 1995 average golf club memberships were estimated to be worth only a fifth of their value in 1988. Also, there was a general decline in golf course patronage, hence it was much easier to get into a golf course for a casual game, so the need to buy a membership became less desirable. ‘Golf-club memberships turn to duffers’, The Nikkei Weekly, 20 May 1996. Annual golf club bankruptcies ranged from 17 to 50 a year (‘Bunker mentality sets in as Japan’s golf goes west’, The Australian, 2 January 2002). Richard McGregor, ‘Tycoon’s demise a sign of the times’, The Australian, 18 February 1995. By this time Takahashi and his investment advisor and confidant Bungo Ishizaki had parted company. Australian Financial Review, 12 July 1993; The Australian, 15 July 1995. Yomuri Shimbun, quoted in The Australian, 10 February 1995. The most prominent politician who was caught out was Toshio Yamaguchi, a former Minister of Labor who had received an illegal loan of $70 million for a golf course development. In the Finance Ministry a senior official went on a free flight to Hong Kong with Takahashi, while another was lavishly entertained by Takahashi in expensive restaurants in Tokyo (The Australian, 14 March 1995).

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22 23

24

25 26 27

28

29 30

31

32

33

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The Age, 3 April 1995. ‘The King’s Giant Crash’, Time, 27 March 1995, pp. 32–33. In 1991 Japanese sources estimated EIE’s debt breakdown to the major banks as follows: LTCB $2.55 billion; Mitsui Trust and Banking Company $418 million; Sumitomo Trust and Bankng Co. $257 million; Mitsubishi Trust and banking Co. $222 million; Nippon Credit Bank $126 million; $80 million to other banks; EIE also owed about $2 billion to non-bank lenders (Courier-Mail, 16 July 1991). The Age, 26 April 1991. Paul Coombes, ‘EIE’s creditors come calling’, The Bulletin, 27 July 1993, pp. 72–73. Its potential partners were identified as the Daiwa Bank or the Nippon Credit Bank. These two banks had also been weakened by the weight of huge non-performing loans (The Australian, 23 June 1998). The Australian, 10 February 2000. The Age, 20 November 2001. Two indices of the severity of the slump on the Gold Coast were the number of houses sold and the extent of vacant office space. The sale of houses on the Gold Coast peaked at 14,669 in 1988, and declined to 5,070 in 1991. Office vacancies peaked in 1993 at 25.7 per cent for the whole Gold Coast and 36.1 per cent in Surfers Paradise. This meant that more than a third of all office space in the central commercial area of the Gold Coast was empty (Department of Lands, Brisbane, Australian Financial Review, 4 August 1994). Gordon Douglas of PRD Realty on the Gold Coast said that, ‘Sanctuary Cove got caught with property aimed at the Japanese market which was never priced realistically for Australian buyers’ (The Australian, 31 August 1992). Gold Coast Bulletin, 18 July 1992. Paul Murphy, Director, Herron Todd White. Personal communication, 14 April 1994. For example, one large house had a listed price of $955,000 but was sold at its limited bid price of $565,000. Also, a Gold Coast builder bought 13 blocks of waterfront land for $2.88 million, when its original listed price at the Ultimate Auction was $4.32 million (Gold Coast Bulletin, 31 August 1992). “White shoe brigade” chief dies in Canada’, The Australian, 19 December 1994. Matthew Franklin, ‘Japanese investor hit over $30 million tax scandal’, Courier-Mail, 17 May 1991. Courier-Mail, 19 November 1993.

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37 38

39 40 41

42 43

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46 47 48

49

50

51

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Courier-Mail, 13 March 1992. David Kozik, Marketing Manager, Shinko Australia Ltd. Personal communication, 25 October 1994. ABC TV ‘Four Corners’, 1 October 1991. For example, in September 1998 Shinko went into partnership with Jefferson Properties to develop a $21 million neighbourhood shopping centre and small office complex on a 2.7 hectare site on its resort (HerronTodd White, The Month in Review, September 1998). The Australian, 8 February 2001. ‘Daikyo puts on a heavy coat’, Gold Coast Bulletin, 26 June 1992. Daikyo Kanko Corporation’s debts were estimated at 1.2 trillion yen, with its main creditor being the Sanwa Bank (The Australian, 4 July 1992). Gold Coast Bulletin, 30 July 1992. Daikyo Kanko Corporation shares experienced a slow rise giving them an average value for 1994 of around 1,200 yen. Sir Sydney Schubert, Executive Director, Daikyo Australia Ltd. Personal communication, 15 April 1994. Staff in Japan were to be reduced from 2,500 to 2,000 and assets worth $500 million in Japan and $340 million in other countries were to be sold to raise capital (quoted in The Australian, 3 October 1992). Daikyo Kanko Corporation had 1,500 staff employed in Australia, mainly in Cairns and on the Gold Coast, of these about 100 would be made redundant. The major assets that Daikyo Kanko Corporation sold at this stage in Australia were the Sheraton Hotel in Brisbane for which it received $100 million, and its 24.2 per cent shareholding in Jupiters Casino. Daikyo Kanko Corporation also closed its real estate sales agency on the Gold Coast. Personal communication, 15 April 1994. The Weekend Australian, 6–7 June 1992. It was a 320 room, four-star resort hotel managed by the Radisson group. ‘Casino mogul in $50 million deal on Palm Meadows’, Gold Coast Bulletin, 14 May 1996. In its move to rationalise operations and increase cash flow Daikyo Kanko Corporation sold more assets and cut costs to a greater extent on the Gold Coast than in Cairns. According to Sir Sydney Schubert, this was because by the mid-1990s Yokoyama saw greater potential in the tourist/leisure market in Cairns than on the Gold Coast, and so wanted to concentrate his company’s activities in that north Qeensland centre. Weekend Gold Coast Bulletin, 19–20 May 2001.

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Herron Todd White, The Month in Review, April 2003. Daikyo Kanko Corporation also went into partnerships in Cairns. The major one being that with Australian home building company Delfin. Their joint project was the development of a 1,600 dwelling housing estate on land the corporation had bought in 1990. In Belle Maison a 24th floor 216 square metre unit was discounted from $780,000 to $580,000, a 9th floor unit of 158 square metres from $425,000 to $330,000. Examples of discounts in Grand Mariner were a 6th floor, two-bedroom unit from $525,000 to $360,000, and a 14th floor, two-bedroom unit from $556,000 to $395,000 (Australian Financial Review, 9 September 1994; Herron Todd White, Monthly Review, June 1994). The Nihon Keizai Shimbun reported that Maruko was told by its bank, the Mitsubishi Trust and Banking Company, to sell $200 million in assets to help cover its debts of $1.7 billion (12 November 1990). ‘There is certainly no Japanese investment at the moment. [But] there are always bargains to be had at this stage of the cycle. If the Japanese bought at the peak four or five years ago, you could expect to get anything between 30 per cent and 50 per cent off. Some of the Japanese didn’t know the market as well as Australian investors’, Alan Midwood (Gold Coast Bulletin, 17 October 1992). Gold Coast Bulletin, 18 June 1993; The Australian, 28 January 2003. During the financial year 2002–3 foreign investment into Gold Coast property was valued at $151 million. The most important sources of this captial were: Singapore $40.6 million, Japan $22.8 million, and the UK $20.4 million (The Australian, 22 April 2004).

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Appendix

MAJOR JAPANESE INVESTORS ON THE GOLD COAST INVESTOR

TYPE OF COMPANY

LOCATION OF PROPERTY(IES)

STATE OF INVESTMENT END OF 1996

Ado Star (Aust.)

Private company of Katsuhiko Yamagata & Gold Coast partners

Crooked House Restaurant, cnr. Cambridge Rd & Markwell Ave, Surfers Paradise; Aug. 1990, $3.1m

Still own it; also operate 3 other restaurants on the Gold Coast

Alpha Management Qld. (K. K. Alpha Corp.)

Shipping co., ski & golf resort developer in Japan, also in Hawai’i

Jim Raptis bought 9.6ha island for $7m, built bridge, sold Ephraim Is. in Broadwater Oct. 1989 for $43.5m; plans for $400m low-rise Venetian-style resort include 300 room hotel

Has permits to build on land, no development; Dec. 1995 sale to Lewis Land group, $10m

Anabuki Construction Largest Japanese condominium developer

1.15ha high-rise development site, Still own it, bought 1989. $21m, Main Beach, but on the market Stafford Ave, Lennie, Mount Batten & Tedder Sts., planned $100m, 52 storey apt. building

Asano, Tormi

Private investor

664m2, 3 storey office building. Still owns it Glenferrie Drive, Robina, Jan. 1991, $6.1m

Ashizawa Corp. Australia (Ashizawa Contracting Co.)

Japanese construction & development company from Yokohama

Assembled 5,561m2 site on Nerang Placed on market, Oct. 1994, River frontage & Ferny Ave, again Oct. 1995 sth end of Surfers Paradise between Surfers Hawai’ian Tower and Florida apts., opp. Fern Street in 1988–89, $6m; planned 34 storey, $30m, high-rise apt. 3,320m2 dev. site on opposite side of Highway to above, bought for $4m; 22 level apt. tower planned

Placed on market Oct. 1995

224

Appendix

INVESTOR

TYPE OF COMPANY

LOCATION OF PROPERTY(IES)

STATE OF INVESTMENT END OF 1996

Ataka Australia (K. K. Ataka Shoji)

Otsu City restaurant chain

Japanese restaurant at 3090 Gold Coast Highway; bought July 1986, $720,000

Sold to Mortalodge, July 1993, $1.35m

Axis Ltd (Dr B. Ishizaki, EIE & McMaster Constructions)

Japanese property consultant & Gold Coast building company

Pinewood Lakes, 184 condominium developments, adjacent to Sanctuary Cove. $55m; Oct. 1989 start

Project abandoned late 1990

Big Arrow Enterprises (Showa Build Co. & Bronberg Co.)

Two Japanese companies Purchase of investment units, est. Aust. development Runaway Bay; 11.4ha site opp. company: Showa Build Co., Slatyer Ave, Southport, 1989 Tokyo golf course property owner; Bronberg Co., financier

Staged dev. (1994–97) of $60m residential project on bought site, adjoining Southport golf links; neighbourhood shopping centre, 1995–96 completed

Biwako

Co. assoc. with private Japanese investor Motofumi Kaneko

Office building, ‘Bank of NZ Building’, Marine Parade, Southport, bought Dec. 1989 for $4.9m

Still owns it

Brockson

Chemical products manufacturer — Hishiki & Co. headed by baseball star Sadao Hishiki

184ha site, Guineas Creek Rd., Tullebudgera; Aug. 1991 — plans for $123m, 18 hole golf course, 152 room hotel, 547 residential units

July 1992 — creditors threatened legal action against the company; banks in Japan withdrew support

Calsonic Management Services — a subsidiary of US co. Calsonic International, a subsidiary of the Japanese Calsonic Corp.

Japanese industrial firm (car exhausts for Nissan)

600ha site, west of Gold Coast airport, to be developed as $200m mini-city: 2,900 residential sites, shops, 200 room hotel, recreational amenities, industrial sites; bought 1989; spent $4.5m planning dev. and gaining permits

Project abandoned, site sold in Aug. 1994 to Colibri, linked to Leda Holdings, Sydney; they increased lots to 4,700 and resid. density from 9 to 25 per ha

Clearwater (Travel Planning Corp. of Japan)

Japanese travel chain

Broadbeach Motor Inn (66 rooms), paid $7.8m

Sold to HIS Investments for $4.5m

Casa Blanca Motel in Broadbeach (37 rooms) at intersection Nerang–Broadbeach Roads, paid $5.5m early 1990

Sold to HIS Investments for $2.9m

Appendix

225

INVESTOR

TYPE OF COMPANY

LOCATION OF PROPERTY(IES)

STATE OF INVESTMENT END OF 1996

Comestock Corporation Australia

Private co. owned by Eikichi Yazawa, prominent Japanese pop star

Development site, cnr. Northcliffe In 1992 in hands of Terrace & Markwell Ave, mortgagee, Natwest. Sold Surfers Paradise in early 1993 to Jim Raptis, Gold Coast developer Rhode Is., 172 unit resid. dev. adj. to Surfers Paradise golf course

Developed it, but had to discount in 1992; Aug. 1994 receiver auctioned last 10 units and development site

Amalgamated 9,506m2 site in Bundall Road in 1987–88, $10.9m; plans for 24 storey office & studio tower

Sold site to local developer (Peter Kurts Group), Dec. 1993, $2.5m

Comfortable Housing Developments

Private company of Various small-scale residential Japanese Gold Coast unit and townhouse projects residents Toshimasa Tamamiza and Minoru Tokita

Developed and sold them; 1996 building of 630m2, 2 storey office building, 59 West Burleigh Rd, Burleigh

Cosmo

Tokyo-based company

4,064m2 site bought Aug. 1989. Old Burleigh Rd & Broadbeach Boulevard, 27 storey, 231 apt. tower planned; 4.4ha site cnr. Sickle Ave, Oxenford Rd, Hope Is. auto museum planned with Aust. co. Hontan 1990, $0.9m

Defaulted on purchase, Nov. 1989; site sold June 1995, $0.8m.

Co-You Corporation partnership with Gordon Pacific

Private Osaka developer

152ha golf course resort site in Currumbin Valley; bought for $23.5m, $200m resort planned

FIRB rejected purchase of site in Sept. 1990; subsequent sale to Kornhauser, Gold Coast developer

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Appendix

INVESTOR

TYPE OF COMPANY

LOCATION OF PROPERTY(IES)

STATE OF INVESTMENT END OF 1996

Daikyo Australia (Daikyo Kanko Corporation)

Largest Japanese condominium & resort developer

Site, Staghorn, Pandanus & Ferny Ave, Gold Coast Highway, bought 1986; $65m, 296 room ‘Gold Coast International Hotel’ built

Rumours of its sale since 1993, most recently, mid-1996 to Hong Kong Carlton Hotel Group, $85m

347ha site purchased 1985, dev. $30m ‘Palm Meadows’ golf course resort, with $3m clubhouse complex; approval for 400 room hotel

Golf links, clubhouse, one residential cluster completed; 330ha, incl. golf links sold to Hungtat World Wide, June 1996, $50m; 2.5ha to Phil Sullivan, $3.5m for hotel & resid. dev.; 4.42ha to Japanbased Sankyo Development, $17.5m; 10ha retained by Daikyo for townhouse project

Purchased 1986 — 24.2% share in Jupiters Trust

Sold in Sep. 1992

6,807m2 dev. site on Pandanus, Ocean Ave & Gold Coast Highway, bought Feb. 1987, $9m

Plan to develop $250m, 48 level resort/residential project; plan abandoned. Still own it

130ha Mudgeeraba golf course & resort, Somerset Drive, developed 1989 (Manutso-Daikyo)

Still own it

Eight storey office building 33 Elkhorn Ave, Surfers Paradise, bought Dec. 1988, $4.5m

Still own it

Six storey office building 29 Elkhorn Ave, Surfers Paradise, bought Dec. 1988, $4.5m

Still own it

Dev. site on Pine Oak, Norfolk & Ferny Ave, bought July 1989, $17.6m; 335 room hotel, shops, apartments proposed

Owner, ex-Daikyo director (as Armboy); reports of its sale in Nov. 1995

Hill Pde & Breaker St, Main Beach; ‘The Inlet’, 93 units, 34 storeys built Nov. 1989 – June 1991, $75m

Units sold, discounting from April 1992

Bayview St, Hollywell caravan park, site 6.2ha from Kornhauser & Burchill; planned $120m three star resort & conference centre

Still own it; would like a small development, head office in Japan against it

Daiwa House (Aust.)

Second-largest Japanese builder, esp. prefabricated houses, also has hotels in Japan; has US subsidiary

Appendix

227

INVESTOR

TYPE OF COMPANY

LOCATION OF PROPERTY(IES)

STATE OF INVESTMENT END OF 1996

Dia Kensetsu Co.

Third-largest housing & condominium developer in Japan, hotels in Hawai’i & California

Dev. site Esplanade and adjacent Raptis Plaza bought 1990, $128m; plans 265 room tower hotel & 55 apartments over shops

Purchased Raptis Plaza and adjacent development site, owns both; no development of site; option given over airspace above Raptis Plaza to Forrester Parker for possible development, Oct. 1996

EIE International Corporation

Small co. marketing magnetic tapes, expanded into golf course development in Japan, then in late 1980s into hotel/resort properties around Pacific

682ha Sanctuary Cove resort, golf course, 250 room Hyatt Regency Hotel; bought from Ariadne, Sept. 1988, $341m

Still own it, but mortgagee Long-Term Credit Bank (LTCB) of Japan assumed control in Aug. 1993

Bond University, Robina, 50% equity with Bond Corporaton in 1986, $30m; bought other 50% in 1990; total investment $155m

Sold by LTCB to Univ. of Qld in 1995, $107m sale challenged by Bond Univ. Council

Exellent Life Corporation (Incorp. in Japan)

Insurance co.

2,8412 dev. site Woodroffe Ave & Site sold to Sunbelt Realty, Pacific & Peak Sts, Main Beach; June 1996, $3.25m for bought in 1988, $2.6m for 24 storey, 20 storey, 80 one bedroom unit 16 luxury apartments building apartment development

Fedwood (Royal Airlines of Japan)

Airline

Bought Parkwood international golf course at Musgrave Hill

Completed it Oct. 1991 and still own it

84ha site at Gilston in 1988 for development of $25m resort & residential project

Still own it

6ha site, Bourton Rd, Merrimac

Still owns it(?)

648ha Reedy Creek Station, west of Robina, Dec. 1989, $30m

Still owns it(?)

Fukumura, Fumikiyo

Goldco Development (50:50 Aust.–Jap. Hirayama Kikaku Co.)

Private investor

Family construction and development company from Tokyo

Built office building 64 Ferny Ave, H. Kikaku bought it from S. Paradise (completed 1989) collapsed Goldco Dev. Ltd, 1990, $15.5m Started contruction of office Goldco collapsed building 68 Ferny Ave (Jan. 1990) H. Kikaku still involved

Golden Peak

Originally Australian development co. now Japanese controlled

20782 development sit on Ferny, Palm & Cypress Ave & Gold Coast Highway; assembled by J. Minuzzo, June 1989, $25m with loan from Daikyo

Daikyo as mortgagee own it, attempted sale May 1991; leased by J. Sorensen for mini-car track

228

Appendix

INVESTOR

TYPE OF COMPANY

LOCATION OF PROPERTY(IES)

STATE OF INVESTMENT END OF 1996

Hanayama, Noriyuki

Private Japanese invester, owns Sony Centre in Tokyo

‘Seabank Centre’, 8,412m2 office building Southport, early 1987, $13.5m

Hanayama died late 1989; administrators of estate sold to Peter Kurts Group, May 1996, $12.1m

Haneda, Takao

Japanese investor from Tokyo, large property owner

Aug. 1989 bought Paradise Avenue shopping and office building for $25m

Still owns both properties

May 1990 bought Forum shopping arcade for $35m; both purchases from J. Raptis HIS Investments

Hideo Sawada, secondlargest chain of travel agencies in Japan

Bought 5,482m2 site on Gold Project built Nov. 1994 – Coast Highway, Clifford St, Dec. 1996, ‘Watermark Hotel’ Hamilton Ave & Cambridge Rd in May 1994; $9m, from P. Zarro mortagee dev. of 407 room, 21 storey, three-star hotel, $80m; see also Clearwater Pty Ltd

Hokojitsugyo Co. (Coomera Resorts)

Osaka-based investment co. in partnership with Kolback Group (Kerry Packer)

Assembled 757ha site on north shore of Coomera River at cost of $66.8m (bought 1989–90); planned $1 billion resort/resid. development

Itoh, C.

Japanese trading house

‘Silverpoint’ high-rise block, Main Completed and units sold; Beach (50:50 Beazer Properties), some discounting 31 storeys, 51 units, const. May 1988–Sept. 1990

Tried to terminate partnership, 1994, since then court dispute

Moran Hospital of Excellence, Tugun, 300 bed hospital (40:20 with Moran Health Care Group & AGC), developed at cost of $320m; high-tech estates of Cobaki dev. to be linked to it

Westpac withdrew support, not equipped, sold off at a loss as a standard private hospital in Oct. 1994

Japan Management Corporation

Family investment co. est. by Zin Sawachika who came originally with Daikyo

‘Elizabeth Broadbeach Waters’, low-rise, 32 unit residential development (Eady Ave, Broadbeach Waters)

Completed and partially sold

Jimna Consortium has equal shares among Japan Airlines, Toyo Real Estate Co. and Nomura Real Estate Aust

Major Japanese airline and property arm of conglomerate and security house

1.48ha site; 47 Cavill Ave, N.E. cnr Ferny Ave & extending northwards, with thin wedge to Gold Coast Highway, L-shaped, Bought March 1988 for $65m from Ariadne

Still own it, originally a $480m dev. proposed with Lend Lease; Dec. 1991 a scaled-down version of a 28 storey hotel, retail & entertainment space & 28 storey residential tower (serviced apts), $200m; since early 1995 site of temporary market

Appendix

229

INVESTOR

TYPE OF COMPANY

LOCATION OF PROPERTY(IES)

STATE OF INVESTMENT END OF 1996

Jollysea

*

Office building, Upton St, Bundall, bought May 1988, $1.5m

Still own it

Built ‘Isle of Palms’, 174 unit high-rise, $32m, Dec. 1988 Joshin Aust.

Japanese residential developer

Development site Trickett Ave, For sale since March 1992, Northcliffe Tce, bought June 1989, auction 25 March 1993, $2.75m reserve price of $1.5m not reached

Kato, M.

Private Japanese investor.

Office building, 140 Bundall Rd, bought June 1990 for $7.7m

Still owns it

Kenotaira Corp.

*

Purchased investment building at 16 Queensland Ave; Broadbeach, July 1987; $3.8m

Sold to Peter Kurts Group April 1994, $2.5m

Kirkby

Private investment partnership associated with Kameyama and family from Japan

Yard, 2 small buildings, 3084 G.C. Highway adjacent to Ataka Restaurant building; bought June 1988, $2.9m

On market July 1990 for $5m, not sold; March 1995 on market, $1.5m

Kishu Railway Co.

Private rail company, also owns resorts in Japan

‘Quality Beachcomber Hotel’ 28 storeys, 300 rooms, between Hanlan & Trickett Sts; bought Sept. 1988, $38.5m

Still own it, Accor Asia Pacific have management rights, ‘Mercure Hotel Beachcomber Gold Coast’

Kokusai Motorcars

Tokyo taxi & tour bus company, property arm

Paradise Centre — 120 shops Own it, refurbishing and apartments; Ramada Hotel, retail area 406 rooms; Cavill Ave, Hanlan St, Esplanade, G.C. Highway, bought Ramada Hotel Nov. 1986, $47.5m; Paradise Centre, Dec. 1988, $130m

Koshin Australia (Koshin Co.)

Tokyo sharebroker Mitsuhiro Kotani est. property investment company

1.36ha development site, Palm, Ferny, Staghorn Ave & G.C. Highway, bought from Daikyo, June 1988, $30m; gained Gold Coast Council approval for 543 room, $250m resort/hotel

Fall of Japanese sharemarket, Koshin stopped dev. on Gold Coast, Nov. 1990; declared bankrupt in 1993; sold site to Hudson Conway Oct. 1993, $10m

‘Apollo’ apartments (80 units), bought Jan. 1989 for $21.5m

Sold Oct. 1993 for $11m to Phoenix Investment Holdings in Singapore

92ha Surfers Paradise raceway site, Sold Nov. 1993 to Nifsan bought from Daikyo, June 1988, $15.8m 167ha Sapphire Lakes development site, Mudgeeraba; bought 1989, $23m; plan for $350 m golf course resort * unknown

Sold Nov. 1993 to Nifsan, $8m (four properties bought 1988–89, $91m, sold 1993, $34.5m)

230

Appendix

INVESTOR

TYPE OF COMPANY

LOCATION OF PROPERTY(IES)

STATE OF INVESTMENT END OF 1996

Kumagai Gumi

Japanese civil engineering construction co.

$22m Port Meirion Village, Runaway Bay resid. units and marina; joint venture with Concrete Constructions & AGC (K.G. 33 per cent interest)

Completed 1989 and condominiums sold

Kyowa Wing Aust. (Kyowa Wing)

Suomitsu Ito & Akiko Ito (Nagoya), private investment company of Itoman Co. director & his wife

Bought in 1988, 6,624m2 dev. site, $14m, G.C. Highway, View Ave (S.W. side) to Esplanade (L-shaped site); planned 35 storey, 300 room ‘Imperial Wing’ hotel/retail complex, $90–100m

Midohsuji Gen. Industrial Corp. (Itoman group), main creditor, 1993 foreclosed on Kyowa Wing, forced to sell Nov. 1993 — $8.16m to Hudson Conway

Liongain

Private company est. by 227ha site bought Oct. 1988 four Japanese businessmen for golf course/residential dev. relatives & friends — Mike at Yawalpah Rd, Pimpama Yamanaka, Toshi & Motoko Ida & Hiro Yamanaka; have travel, property & manuf. interests

‘Gainsborough Greens’ club house & golf course $5.6m, opened Feb. 1990; development of housing component proceeding, but at a slower rate

Maruko Aust.

Japanese developer

‘Rivage Royale’, 176 units, Units in process of being sold; Brighton Pde, Southport, high-rise; Nov. 1996 — 90% sold; since built mid-1990 – Dec. 1991 Nov. 1991 head office under conrol of creditor banks; Maruko Aust. permitted to trade its way to solvency; bought, Oct. 1994 by Daiei, Japan’s secondlargest supermarket chain

Maruyoshi International Australia Co.

Kyoto company

Bought eight storey resort and retail centre, Orchid Ave, Dec. 1989; $11.7m

Still own it

MID Australia (Matsushita Electric Industrial Co.

Property arm of secondlargest electronics group in the world

ANA Hotel, 408 rooms, cnr. Elkhorn Ave & G.C. Highway, March 1988; $128.5m purchase

Own it

202.3ha Royal Pines Resort, Ashmore $500m, include 330 room hotel, 2 golf courses, and 1,050 residential dwellings; site bought in 1987 for $12.5m from ANZ Bank, to be developed between 1988 and 1991

Own it, are developing it, but more slowly and with fewer residential units; completion 2002

Appendix

231

INVESTOR

TYPE OF COMPANY

LOCATION OF PROPERTY(IES)

STATE OF INVESTMENT END OF 1996

Mitsui & Co. & Nippon Shinpan Co. (24.5:75.5)

Major trading house & credit card company

Sheraton Mirage hotel, 402 rooms, and condominiums, Main Beach, 49% share, paid $275m in 1988; Nov. 1990 bought other 51% $123m when Quintex in receivership

Still owns it

Mitsui Construction Co. (Kuji)

Orient Finance, Japan’s largest consumer credit co. & Japan conglomerate construction arm

Grand Mariner, 43 storey, 194 unit high-rise, built 1990–1992, $150m

Units in the process of being sold, some discounting

Mortalodge

Private Japanese investment partnership

Building G.C. Highway opp. Trickett Ave, including Ataka Restaurant, July, 1993, $1.35m. Also, 3098–3100 G.C. Highway, Oct. 1991, $0.9m; 3094 G.C. Highway, Sept. 1992, $1.32m

Still owns them

Motoji Kurita

Private Japanese investor

Bought five storey office building, 52 Davenport St, Southport; July 1988, $3.725m

Sold Oct. 1993, $1.95m, to Lussac

Nara Holdings (50:50 with Seaworld)

Japanese construction company

Nara Hotel, 400 rooms, $60m

Still own it

Paradise Springs Resort, 92ha site purchased Jan. 1989, $8.7m, Priddeys Rd, Robina

Developing it, clubhouse opened Dec. 1992

Narson

*

Site bought 1988, Casey Rd development of 100 townhouse project; Sanctuary Gardens adjacent to Sanctuary Cove

Development commenced 1994

Narui Gold Coast (Narui Natin Co.)

Japanese wood chipping co., 900ha site of a large resid./ Still own it, development clears land, developed five commercial project, 5,400 resid. commenced June 1992; golf courses in Japan units, 250 room hotel, 18 hole scaling down of proposal golf courses (2), Kingscliff (NSW); bought 1990, cost of project $1.76b

Nifsan (1989, 50:50 with Chartered Pacific as Nifco Kangyo)

Plastics co., newspaper proprietor and with banking interests — Toshiaki Ogasawara

* unknown

77.8ha site, including Carrara Golf Course; Broadbeach–Nerang Road at Alabaster Drive (1989); to dev. golf centre, $120m, hotel and townhouses

Dev. 18 hole golf course only

167ha ‘Sapphire Lakes’ dev. site from Koshin Co. Ltd, Nov. 1993; $13.5m

Split into two resid. estates; staged release on market Feb. 1995 onwards; Sept. 1996 — two resid. neighbourhoods dev., house–land packages in the third stage placed on the market

232

Appendix

INVESTOR

TYPE OF COMPANY

LOCATION OF PROPERTY(IES)

STATE OF INVESTMENT END OF 1996

Niizeki Constructions

Private building co.

1.17ha site, Main Beach, Lennie, Tedder, Hughes & Stafford Aves; bought in March 1989 for $16.7m

Sold site, April 1984, $8.6m to developer Harry Triguboff

Nikko Building Co. (Nikko Securities)

Japanese Securities House

116.5ha golf course resort for Nikko employees, Gold Coast, Springwood & Boowaggan Rds Merrimac, 200 rooms, $100m

Still own it

Nimiya Shoji Co. (Broadleaf )

Isao Kayashima, private investor in Japan — has export firm in Tokyo

Six storey Cavil Park retail/office complex; bought 1989, $15.5m

Sold to G. Parlby (Sydney) & Jim Tonge (Gold Coast), Dec. 1995, $6m

Sorrento Village shopping centre, bought 1987, $3.4m

Sold in 1991

Office building, 5,233m2 42 Bundall Rd; bought 1990 for $10.25m

Sold (Nov. 1994) for $3.2m to Lorenzo Galli, local developer

Nippon Enterprise

Consortium of private businessmen — Konta Sakonju (Head, Nakano High School) and Shonji Yamada (chain of drug stores), Kunio Hashimoto (business consultants), Nohoru Suzuki (car dealer)

Maudsland Rd, Clagiraba, bought 162ha site, 1989, $18m for golf course, residential development, community centre, Japanese school (Gakko Hajin Nakano Gokuen)

Development commenced 1991; progress since then unknown

Nishizu Aust.

Property development company

Industrial property, Lawrence Drive, Nerang, 1990; 114m2 retail outlet in The Moroccan, Elkhorn Ave, S. Paradise, $985,000, Sept. 1996

Still own both properties

Ocean Resort Development

*

445m2 development site, Main Beach Parade (south of ‘Golden Sands’); bought early 1991, $725,000

Put on market Jan. 1994 for $895,000; taken off market April 1994 (to sell as land/ house package later)

Near above, 1,113m2 site bought for $1.7m

Completed $1.7m, 5 unit develop Manage it as part of the retail chain

OK Gift Shop

Retail chain owned by Japanese TV star Kay Ohashi

281m2 shop at 23 Orchid Ave, S. Paradise, May 1996, $3.0m

Okachu Australia

Osaka-based clothing manufacturer then golf course developer

174ha Arundel Hills Country Club In process of development, at Arundel, west of Labrador golf but at a slower rate; course resort, 716 residential lots, clubhouse opened 1992 $200m, commenced dev. 1989

* unknown

Appendix

233

INVESTOR

TYPE OF COMPANY

LOCATION OF PROPERTY(IES)

STATE OF INVESTMENT END OF 1996

Opalsearch (49:51 All Nippon Airways Trading Co. & Van Brugge Holdings)

Japanese airline and Sydney jeweller & opal retailer

49% share bought 2 storey retail building, 21 Orchid Ave, $7.7m, March 1989; bought units 89 & 92 at 23 Orchid Ave, $7.2m, Sept. 1989

Still own it; reopened after extensive renovations (Nov. 1994); unit 89 sold to OK Gift Shop Co., May 1996 $3m; unit 92 sold to Wing Aust. Pty Ltd, May 1996, $2.5m

Pacific Atlas

Tokyo-based developer

Bought between 1987 & 1990, 8,216m2, development site, $15m, View & Elkhorn Ave, The Esplanade (L-shaped block), planned 35 storey, $100m residential/retail development

Pacific Atlas still exists; forced to sell G.C. assets; sold Oct. 1993 for $11m to Macarthur National & Raptis Group, developed ‘The Moroccan’ on site

Bought May 1988, ‘Sahara Court’ apartments, $8.6m

Sold to Raptis Group

Saitama Kogyo

Japanese investment co.

Purchase of office building, 14 Carrara St, Benowa, $4.4m, 1989

Still own it

Sanpord Australia (Sanpord Co.)

Japanese timeshare and restaurant operator

Oct. 1990, ‘Bilinga Palms’, 17 units, $4.5m, Tullebudgera Valley health resort

Still own it?

Sanwa House (Sanwa Home)

Small house and condominium developer

‘Australis Point’ high-rise development and hotel, Marine Pde, Labrador; bought site 1990, $28m; project cost $290m

Purchase of site not completed, trustees of Aust. vendor suing Sanwa House for damages, case taken to Japanese courts

Sapporo

Private investment company

Office building, 10 Welch Street, Southport, bought April 1990 for $1.25m

Placed on market, Oct. 1994, est. value $700,000, sold March 1995, $560,000 K. & J. Trembath

Senshukai Co. & Nissho Iwai Corp. (60:40)

Largest mail-order retailer in Japan and security firm & trading house

‘Belle Maison’, high-rise, Broadbeach, built July 1990 – June 1992, $75m

Units sold between 1990 & 1996, some discounting

Shinkai Kohsan Aust.

Property investment arm of trading company

Errol Stewart’s warehouse, bldg, Oak Ave, Miami, bought March 1988

Placed on market April 1992

Shinko Australia (Shinko Corp.)

Osaka-based builder of golf courses & sale of memberships

368ha site, $21m, 1987 bought for Hope Island resort, Coomera — 400 room hotel, marina, golf course, 1,500 houses; est. $1.5b

Developing it, but more slowly, 18 hole golf course $13m, clubhouse completed

S’International Development

Architects with head office in Tokyo

Office tower development site, Marine Pde, Short St, Southport, Oct. 1990, $3m

Sold June 1995, $1.4m, to Gold Coast doctor

234

Appendix

INVESTOR

TYPE OF COMPANY

LOCATION OF PROPERTY(IES)

STATE OF INVESTMENT END OF 1996

Sohken Australia

Golf course developer

Purchase of land at Arundel in 1990 for golf course estate

Staged development of estate, first, completion of links & clubhouse; residential clusters in 1994 and 1995

Starts International Corp.

Tokyo-based developer partnership with Melb.based Burlock Group

1.086m2 site, Main Beach Pde, Pacific & John Kemp Sts, Main Beach, $20m; planned 35 storey, $160m apt. building

1991 Burlock Group defaulted, Starts International became mortgagee owner; Dec. 1995 sold to Sydney developer Harry Triguboff, $11m, plans twin 25 storey towers

264m2 building with restaurant, 2779 G.C. Highway, Broadbeach, 1989

Sold May 1995, $870,000

Surfers Paradise Travelodge Motel, $70m, 20 storeys, three-star, 267 rooms

Opened May 1991; new wing added, 61 rooms, 1995

88ha site bought 1988 for $15m; Lakelands golf-residential resort (including 220 room hotel) at Merimac between Springbook Rd & Robina Parkway; site bought 1989 for $17m

Still own it, starting resid. subdiv. and golf course development; golf course opened Dec. 1996

Sundai Group; Sun Australia & Sun Lakelands

Operator of chain of private coaching colleges in Japan

Taniai, Horosho & Taniai, Sachiko

Private investors

Bundall Circle retail showroom, 1,981m2 cnr. Ashmore Rd & Upton St, bought March 1989, $10.5m; developed by Raptis Group

Sold Oct. 1994 for $4.9m to Sydney investor

Teikokusha Aust.

Advertising agency in Japan

Bought Gordon Pacific Centre, 8 storey office building, Marine Pde, Southport, Aug. 1989, $16m

Still own it

Tescom Lease Co.

*

7 Mallana St, Surfers Paradise, 16 level, 28 unit ‘Vie Meridian’, completed 1991; $14.5m

Sold Oct. 1994 to Nifsan, $5.7m

TNN Gold Coast (Town Development & Showa Build, 70:30)

Japanese developer company

Bought 11 property sites, 1.8ha, July 1988, $17.6m; built Marriott Hotel, Ferny Ave & Nerang River (Budds Beach), 28 storey, 353 rooms & 28 condominiums, $120m; opened May 1992

Still own it but mortgagee LTCB assumed control Feb. 1994

Office building, Short St, Southport, $2.6m (April 1990) * unknown

Appendix

235

INVESTOR

TYPE OF COMPANY

LOCATION OF PROPERTY(IES)

STATE OF INVESTMENT END OF 1996

Tobishima

Japanese construction co.

‘Australia Fair’ shopping centre, Tobishima’s share sold Southport (50:50 with MEPC), to MEPC in July 1991 $250m, includinng 246 room hotel for $198.2m

Toshin Developments

Owner Tajiiri Yuichi, architect and developer

4,160m2 development site between Sold to Raptis Group Beach Rd & Surf Pde, S. Paradise, June 1996, $3.9m 62 unit apt. bldg. planned ‘Jandream’, 1,820m2 office/retail bldg, cnr. Nind & Scarborough Sts, Southport

Completed 1990

913m2 seven unit retail showroom bldg, cnr. Jade Dr & Anisair Crt, Ashmore

Completed June 1996

Towa Kohmuten Corp.

Japanese develop. & construction co.

Bought Nov. 1987 for $16m, Kooralbyn Valley Country Club and 4,000ha land; bought & added $24m, 100 room hotel; also extra recreation facilities added

Developed it and still own it; April 1996 administrators appointed to clear debts, sale of land proposed

Toyomenka

Seventh-largest trading co. in Japan

Dev. $4m, 28 lot resid. estate in Cotlew St, Bellevue Park, 1989–90

Sold all lots

Tranquility Holdings

Individual developer, Tsutomu Ogawo, Saitama, Japan

‘Vue Mirage’, 9 storey apt. block, Marine Pde, Labrador

Developed and units sold, but more slowly than anticipated

Traveler Corporation

Japanese retailer

Bought duty-free shop in Forum Bldg, Surfers Paradise, 1992; also, bought duty-free shops in Paradise Centre, 1995

Still owns them

Tuscan Australia

Family owned company of Shinichi Nakayama

2,128m2 high-rise development site, Riverview Pde, Surfers Paradise, built ‘Solitaire Riverside’, 18 apartments, 1991–1992

Developed; for sale, Oct. 1994 at discounted price of up to 50 per cent

Verde Australia

Private home builder from Hyogo prefecture

Restaurant and office building at 3120 G.C. Highway; bought March 1989, $3.95m

Still own it

Warcore & Cedric (Hinoki Fudosa & Arai Schoten partnership)

Japanese developers; Hinoki Fudosa is a real estate firm in Japan

1,108ha site, G.C. Highway, Site sold to Sunland Group Ferny & Ocean Ave; bought 1987, Ltd, Nov. 1995, $8.1m $12.5m; 37 level, $200m hotel, construction to start Aug. 1992

236

Appendix

INVESTOR

TYPE OF COMPANY

LOCATION OF PROPERTY(IES)

STATE OF INVESTMENT END OF 1996

Yamashin Australia

Japanese development co. based in Tokyo

‘Main Beach Tower’, 29 storeys, 50 units, built between April 1989 and July 1990

Yamashin went bankrupt 1993; last unit sold April 1994

Development sites at: Monte Carlo Ave, Broadbeach; paid $1.6m in 1989, planned 22 storey residential tower

Sold for $1m mid-1993

3,500m2 site, Woodroofe & Cronin Aves, Main Beach; paid $2.1m in 1989

Yodogawa Kanko Development Co.

Family owned development company

4.73 ha site, Fleay Court, Burleigh Heads; paid $1.4m in 1988, planned townhouse development

Nov. 1993 passed in at auction, $700,000; April 1996 conditional offer of $600,000 rejected

Purchase of ‘Ocean Blue’ (409 units) resort, Birt, Oak, Norfolk & Ferny Aves, Surfers Paradise, $34m; Dec. 1989

Still own it; May 1996 management rights given to Accor Asia Pacific, ‘Mercure Resort Surfers Paradise’

Sources: Lands Dept, Brisbane; PRD Realty; Rider Hunt; Do Management; The Australian; Gold Coast Bulletin; Australian Financial Review; Gold Coast Albert Regional Development Committee; Cityscope; personal interviews.

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