A company controlled by the family of Asia's richest man Li Ka-shing has sold a landmark Beijing property for more than $US900 million, it said, adding to speculation he is cashing out of Chinese property.

Pacific Century Premium Developments - a firm chaired by Richard Li, the tycoon's younger son - signed an agreement on Tuesday to sell Pacific Century Place for $US928 million ($A991.77 million), the firm said in a statement filed with the Hong Kong stock exchange.

The deal is nearly 30 per cent lower than the asking price reported last year for the well-located Beijing property, made up of two office towers, two serviced apartment blocks and a shopping mall, China's Dongfang Daily newspaper said on Thursday.

The deal is the fourth Chinese property disposal by Li's family since August, it said, adding that the sales have fetched a total of nearly 18 billion yuan ($A3.10 billion).

"Li's investment strategy since 1970s shows that he will always sell his assets two to three years ahead of crises to reallocate (the resources)," the newspaper quoted an unnamed industry insider as saying.

Li has already sold properties in major Chinese cities including Guangzhou in the south and the financial hub of Shanghai.

Speculation that the Hong Kong-based 85-year-old was pulling out of China mounted so high that he met the press for 90 minutes in late February to emphasise his confidence in the country's property market and its slowing but still strong economic growth.

China's economy grew 7.7 per cent in 2013, the same as in 2012 - which was the slowest rate of expansion since 1999.

The world's second-largest economy has shown signs of weakness recently with a string of disappointing indicators, including on trade, industrial production and consumer spending, raising further concerns about its health.

A new online database mapping Chinese investment in Australia is the latest tactic the federal government is using to fast-track talks on a free trade deal with Beijing.

Trade Minister Andrew Robb on Thursday launched the interactive resource in Shanghai as Prime Minister Tony Abbott schmoozed business leaders at the Boao Forum on the southern island of Hainan.

Mr Abbott has been struggling to convince China that Australia wants its business, with concerns in Beijing about foreign investment rules holding back talks on a free trade agreement.

He wants an FTA with Australia's largest trading partner as soon as possible, and is optimistic he can achieve one by year's end.

The latest initiative to spur talks contains detailed analysis and animated infographics of Chinese investment in Australia by year, industry, geography, dollar value and investor type.

It will serve a dual purpose by also informing Australians about the realities of Chinese investment at a time when concerns around farm buy-outs and housing purchases is rife.

"This online resource increases knowledge about Chinese investment in Australia and will help inform public debate," Mr Robb said.

So far the resource - soon to be in app form - has recorded more than 180 deals worth $60 billion involving Chinese enterprises in Australia between September 2006 and December 2013.

Mr Abbott has used his visit to North Asia to reassure China it can live with the rules governing foreign investment in Australia, saying more proposals have been approved than rejected.

Mr Abbott has brought a massive business and political delegation to China to impress on its leadership how badly he wants to finalise an FTA with China.

Talks have been dragging on for nearly ten years, and the elusive deal with Beijing remains the missing piece in Mr Abbott's "trifecta of trade" - the other two countries being Japan and South Korea.

But the message seems to be getting through, with Premier Li Keqiang personally assuring Mr Abbott that China is also keen to fast-track a deal.

In a speech at the Boao Forum attended by Premier Li and business leaders, Mr Abbott stressed he wasn't just in China to talk business.

"We don't just visit because we need to but because we want to," he said.

In a sign of deepening ties beyond trade, both leaders also agreed to a series of high-level defence exchanges later in the year.

Goldman Sachs has named Simon Wheatley as the new head of real estate investment banking. Mr Wheatley will replace Alexi Antolovich, who departed the firm to take up a new role at Macquarie Group.

Previously, Mr Wheatley was the head of the bank’s real estate research in Australia. Andrew McCusker will lead the bank’s newly formed REITs/Infrastructure/Utilities conviction sector, supported by Andrew MacFarlane.

Goldman Sachs said Real Estate Investment Trusts, infrastructure and utilities would all fit under a new team, with Mr McCusker at the helm. Mr McCusker would have lead analyst responsibility for the residential REITs as well as his current Infrastructure & Utilities coverage. 

Mr MacFarlane will have lead analyst responsibility for the retail, office and industrial REITs.

The appointment of Mr Wheatley to head up investment banking comes after a raft of changes amongst Australian real estate investment bankers. JPMorgan last month replaced its head of real estate investment banking Tim Ryan with its head of research Rob Stanton. Investment bank Citi will also replace its real estate banking head Simon Ranson with Doug Farrell from the bank’s Asia-Pacific investment banking team.

If ever a Treasurer has had a spinning-plate trick on his hands, it's Joe Hockey. When he returns from his G20 discussions in the US, Hockey will need every ounce of skill to keep the sticks and plates spinning lest one should fall, bringing the economy down with it.

What are the plates? In no particular order, the main ones are: the housing market, the Aussie dollar, business and consumer confidence, business investment, the jobs market and immigration.

Spend too long spinning one, and the others lose momentum. It really will be an extraordinary achievement if Hockey can pay attention to them all, and avoid a once in a generation tumble in living standards.

If that sounds too bearish, consider what Treasury Secretary Martin Parkinson said about income growth over the next decade in his recent Sydney Institute speech:

"If labour productivity were to grow at its long-term average, per capita incomes would grow on average over the decade ahead by only 0.7 per cent per year, leading to real income per capita of around $69,000 by 2024.

"These rates would be much less than the 2.3 per cent growth Australians are used to, which would otherwise yield a real income per capita of around $82,000 by 2024. So there’s a gap of around $13,000 per person between what Australians might hope for and expect, and what might come to pass, on the basis of a reasonably benign scenario.

"By the end of the decade, we will face growth in income per capita of around the rates experienced over the decade ending with the recession of the early 1980s."

Parkinson, and presumably Hockey, knows how delicate the fundamentals of the Australian economy have become. For instance, recent jaw-boning by RBA governor Glenn Stevens is revealing. He has, in his taciturn way, tried to warn housing market investors that house prices can go "down as well as up" because he knows record low interest rates are feeding a growing bubble.

As both Steve Keen, and more recently Chris Joye (once diametrically opposed on the issue) are warning, the level of private debt in this country has become dangerous. Most of that debt is tied up in mortgages. In more normal times, the RBA would be tightening and house prices, though high, would stabilise. But that is just not an option now -- Stevens knows that hiking rates will push the dollar up yet again and stomp on weak shoots of business investment and job creation.

So monetary policy is, for the time being, side-lined -- jaw-boning from the governor is about all we can expect. Cutting government spending in the May budget may make some room for rate rises, but only if the sudden withdrawal of public spending is replaced by private sector spending -- which at present does not look likely.

So with low rates continuing, the housing bubble grows. There were indicators in Thursday's labour force data that a good slice of jobs created in the past couple of months were in the finance industry, especially in NSW. That was celebrated by some -- for this columnist, it's another chilling example of how badly off-course the economy is veering. We do not need to further pump up house prices with borrowed money. What's needed is jobs for the people who live in those houses.

Yes, it's true that new jobs are also being created in the construction sector, and something of a house-building boom is underway.  Just as well, as population growth continues apace, and each new-born or migrant wants a home. To the glass-half-full economist, this is all good news -- people are borrowing to buy and build houses, migrants continue to flood into the country to ensure continuing demand for dwellings, and the finance industry is growing to furiously match savers to spenders just as it has done for a good 15 years.

Trouble is, there is a big fly in the ointment. The reason Joye and others are now sounding a warning bell on housing is that incomes and the level of debt they are servicing are diverging at at rapid pace. It is for this reason alone that Joye could argue four years ago that owing 175 per cent of annual disposable incomes was acceptable, whereas owing 177 per cent today is not -- income growth is not tracking house-price growth nearly as well as it did four years ago (and even then it was not keeping up).

Joye wrote last week: "... there is a fundamental difference between house prices tracking income growth, as they did in 2010, and house prices inflating at 3 to 4 times the rate of incomes, as they are today."

I won't engage with the Keen-Joye debate today. Suffice to say that one of Keen's central arguments is that whenever house prices have looked vulnerable, government policy has applied the defibribulator and shocked them back into growth. First-home buyers' grants (or home vendors' grants, as Keen calls them) is one way to do this. Allowing high migration levels is another. And, of course, making room for the RBA to run loose monetary policy is another.

Today I want to focus on the only one of those options left -- migration -- as state and federal budgets just can't afford first-home buyer grant splurges, and rates are already at record lows. So should we 'open the migration spigot' as some housing market watchers have called it in the past? If you believe Glenn Stevens' equally jaw-boning remark that we'll have a shortage of workers, not jobs, in years ahead, the answer would be a resounding 'Yes!'

Well, I don't believe that statement is anything more than an attempt to talk up an economy in grave danger. If it were that simple, we could ramp up migration to fill all those lovely jobs, and house prices and their attendant wealth affect would keep rising. Consumer sentiment would rebound, businesses would invest and all our problems would be solved.

Current indicators, however, suggest a very different scenario. First, look at how net migration levels were ramped up under the Howard government, and how they continued at high levels through the Rudd/Gillard years (see chart below).

Some critics of that policy argued it was done for cynical reasons -- to pump up demand for the housing finance industry, and help the whole country go on a debt-fuelled consumption binge that extended right up to 2009 when serious domestic deleveraging began. While that cynical view may have motivated some politicians, senior sources working with the Treasury over those years have told me that both Coalition and Labor governments were "scared they'd run out of workers for the mining boom".

History shows that side of the policy worked. We did not run out of workers, inflation was contained and if we all got drunk on debt-funded consumption, that was a by-product of the shift to higher migration, not its raison d'être. The question that will be bugging Hockey when he returns from Washington is: "Can Glenn Stevens possibly be right -- that we'll run out of workers, not jobs?"

The evidence is stark and unsettling. While commentators gleefully received Thursday's labour force data as a 'sudden fall' in unemployment, the truth is that it was nothing of the kind -- as Business Spectator's Callum Pickering explained.

For some time I have been tracking 'total hours worked' as a proxy for the shift from full-time employment, to part-time and the therefore 'under-employment'. What I did not do the last time I looked at the hours-worked data (Does WA care about Shorten's jobs crisis?) was correct it for the continuing levels of population growth.

In the chart below, the final two points of 'estimated resident population' (ERP) have been extrapolated, as the ABS has not released its figures yet. However, ERP has grown in an almost perfectly linear way over the past years, so this is a pretty safe assumption.

Up until the GFC, total hours worked per resident was climbing towards 73 hours per month. It dipped and rose after the Lehman Brothers credit crunch, but since late 2011 it can be seen to be tracking down to around 69 hours at present.

If Hockey is successful in his incredibly delicate balancing act, he will hope that migration can be allowed to continue at high levels, construction and finance work will spark wider consumer confidence, wary businesses will begin to invest, and the number of hours worked per Australian will begin to rise. If that is coupled with the kind of productivity growth Parkinson dreams of, then we might come through this hazardous phase for the economy without those plates falling.

But that's a lot of 'ifs'.

Hockey needs rates to rise, and rates to stay low. He needs more people coming into the country, and fewer people arriving to compete for scarce jobs. He needs to spend to keep public-funded demand high, and stop spending to bring the budget back into balance. He need soaring house prices to boost confidence, and moderating or falling house prices to prevent a dangerous credit bubble.

Keep spinning the plates Treasurer. I can say without a hint of irony or schadenfreude that I hope you can pull off this most spectacular of tricks.

Two expert reports from KPMG and Grant Samuel & Associates have found the planned restructure of Westfield Group and Westfield Retail Trust is in the best interests of securityholders.

Westfield Group plans to spin off its Australian and New Zealand business and merge it with Westfield Retail Trust, forming Scentre Group, leaving Westfield Corporation to focus on its international business.

The independent expert report from KPMG said that fair value contributed by Westfield Retail Trust securityholders should be between 51.3 per cent and 51.8 per cent of Scentre Group.

Westfield Retail Trust shareholders will hold 51.4 per cent of Scentre Group under the proposal.

KPMG said the proposal should be assessed as a "merger of equals" and has compelling benefits including an improved corporate governance structure, removal of the potential for conflict of interests and removal of the related party agreements and fee obligations between Westfield Group and Westfield Retail Trust.

The proposal also has key disadvantages that do not outweigh the advantages, including a change in the risk profile of Westfield Retail Trust, reduction in net tangible assets per share, increase in gearing and transaction costs, KPMG said.

The Grant Samuel & Associates report found the proposal was fair and reasonable, saying the relative contribution by Westfield Group shareholders to the formation of Scentre Group should be between 48 per cent and 56 per cent.

Westfield Group securityholders are receiving 48.6 per cent of Scentre Group under the proposal.

Westfield Group chairman Frank Lowy said he believes the restructure proposal, "creating two leading and independent groups, will generate greater long-term growth and value for both Westfield Group and Westfield Retail Trust investors".

The retail and property group has released its securityholder booklet for the proposal and shareholders will vote on the planned merger on May 29.

Mirvac Group’s transformation under chief executive Susan Lloyd-Hurwitz is stepping up a gear with private equity giant Blackstone eyeing the purchase of about $800 million worth of passive assets from the listed group.

Selling off a substantial slice of the $7.2 billion property portfolio would enable the group to pour the proceeds back into its higher-returning development pipeline just as the residential market booms.

It would also be a coup for Ms Lloyd-Hurwitz who was controversially brought into Mirvac with a mandate to win over international investment partners and follows from the group securing US financial services powerhouse TIAA-CREF in February as a partner on its office development pipeline.

The portfolio deal — foreshadowed by The Australian last week — is to be anchored by Mirvac disposing of a half-stake in the $900 million Sydney landmark Westpac Place to Blackstone, which is chasing a further six assets from Mirvac.

Agents JLL and CBRE are handling the Westpac Place sale, while Blackstone is thought to be looking at other Mirvac assets including Sydney’s 1 Castlereagh Street and properties in West Pennant Hills and North Ryde.

One analyst suggested Mirvac could deploy the sale proceeds into buying joint venture partner Leighton Properties out of the Perth City Link project, including the Queen’s Square mixed use precinct.

Perth City Link, a $5.2bn public-private partnership contract issued by the WA state government, will comprise 1200 apartments and about 150,000sq m of office and retail space.

The $800m could also be funnelled into a takeover bid if Mirvac could muster the support of TIAA-CREF, the analyst said.

“It’s a lot of money to give back to shareholders right away,” the analyst said, indicating that a capital return was unlikely in the short-term.

Mirvac last November outlaid $552m to buy the Harbourside Shopping Centre in Sydney and two office buildings in Melbourne. It also paid $584m to buy seven office towers from GE Real Estate Investments Australia.

After five years of near death, the residential mortgage backed securities market in Australia is roaring back to life, which is both good and scary.

Good because the banks might finally get some competition from non-bank lenders again; scary because the resurgent supply of prime and sub-prime mortgage money from yield-hungry investors is not being matched by the supply of new land to lend against, so it’s just driving house prices higher.

We are seeing two quite different markets being mixed together: one for credit that is active and plentiful (call this one nitro) and one for land that is short (call it glycerin).

In 2013 $26 billion worth of RMBS were issued in Australia, which was the most anywhere in the world according to Deloitte partner Graham Mott. So far in 2014 the market in mortgage securities is still active, with big issues from AMP, AFG, Pepper Home Loans, Heritage Bank and Liberty.

In a speech to the Economic Society yesterday, Assistant Governor (Financial Markets) of the Reserve Bank of Australia, Guy Debelle said: “deal sizes have increased, especially for RMBS issued by the major banks, where the average size has increased to $2.5 billion.

He added that issuance has picked up for the major banks as well as regional banks and non-banks (i.e. credit unions and mortgage originators), with “a number of smaller issuers returning to the market after an absence of several years.”

“RMBS … spreads, over the last year or so, have remained at their lowest level since mid 2007; despite the significantly larger volume that has been brought to market.”

A large and growing proportion of the securities are backed by non-conforming, or sub-prime loans, paying higher yields. These are about half “low doc” (not much detail on the borrower) and half to borrowers with bad credit ratings.

According to one issuer I spoke to yesterday, the buyers are apparently church funds, health insurance companies and State Treasuries that prefer the risk/return equation of sub-prime mortgages.

But most of the RMBS being issued are AAA securities and, surprisingly, a lot of them are being bought by banks, which are, in effect, funding their competitors.

They are doing it because the furious competition, and therefore high interest rates, for retail deposits has filled their coffers and there isn’t enough demand for credit to soak it up. Buying AAA-rated mortgage securities is an easy way to make a return, even if you don’t know the end customer and can’t sell them insurance or super.

Money has been pouring into bank deposits for a few years, and now, once again, it’s pouring into the arms of “shadow banks” at lower interest rates, reminiscent of the non-bank lending boom from 2003-2007.

The typical AAA-rated RMBS issue is at 105-120 basis points above the bank bill swap rate, which is 2.7 per cent at present.

That puts the wholesale cost of funds at 10-50 basis points below retail deposit rates, and is allowing the non-bank lenders, as well as smaller banks, to gnaw away at the massive market shares of major banks.

The only problem with this idyllic scene is that all the money and lending competition is only pushing up real estate prices.

There simply isn’t enough land being released in Australia to match either the demand for housing or the supply of credit.

Bob Day, the Family First Senator-elect and one of Australia’s biggest homebuilders, calls it the “Baptist/bootlegger” problem.

The Baptists and the bootlegger were both in favour of prohibition for different reasons: one for misguided morality, the other to make money. He says that around 15 years ago a similar (non-collusive) coalition of environmentalists and developers formed in Australia to restrict land release.

The result, says Day, is that while the cost of building a house has come down, getting land to put it on is hard and expensive. He says that 20-30 years ago the price of a block of land was about 40 per cent of the cost of a house; now the land cost is 2-3 times the cost of a house.

The result is that instead of being three times the average wage as it used to be, the cost of housing in Australia is 6-10 times average income. First homebuyers are now totally excluded from home ownership unless their parents support them.

It’s not a bubble -- yet -- because it’s merely the true forces of supply and demand working (which is definition of a non-bubble).

Supply is restricted (of land, not houses) and demand is being fuelled by immigration and the plentiful supply of credit to investors looking to take advantage of negative gearing.

And the rejuvenation of the RMBS market will only increase the supply of credit even further and lower its price.

Next: perhaps a recommendation from the Financial System Inquiry chaired by David Murray that retirees be forced to take at last part of their super payout as a pension rather than a lump sum (so they can’t blow it on a world trip before reverting to the aged pension -- which would also help take the pressure off the government-funded aged pension).

That would give another boost to the RMBS market because mortgage-backed securities are perfect investments for private annuities and pensions.

In other words, the supply of credit for mortgages, both prime and subprime -- is only going in one direction -- up -- and it wouldn’t take another subprime mortgage bubble to produce a glut of cash available to be lent against real estate.

By the far best solution would be a big increase in the supply of serviced land in the outer suburbs of Sydney and Melbourne, but it would be slow and the infrastructure would be expensive – too expensive for the first homebuyers themselves to pay, or for governments for that matter.

Will the Coalition Government regulate the supply of credit, or restrict negative gearing? Unlikely.

So it looks like your super will have to go towards buying the kids a house: they'll never be able to afford one.

TIAA-CREF has acquired a 50 per cent interest in Mirvac Group’s 699 Bourke Street Melbourne office building development, through a strategic office alliance.

The 50 per cent stake cost $73 million based on a capitalisation rate of 6.5 per cent and is subject to government approval.

Mirvac commenced construction on the site in August 2013 and will manage the property on its completion in 2015.

The office tower will have a total lettable area of approximately 19,000 square metres and will sit above Southern Cross Station.

In February, Mirvac gave TIAA-CREF first right to acquire 50 per cent co-investment opportunities in its prime-grade Australian office assets for three years.

Mirvac chief executive officer Susan Lloyd-Hurwitz said TIAA-CREF will benefit from Mirvac’s integrated platform and ability to source, develop and manage quality office assets in prime CBD locations.

“We have also significantly de-risked the asset, with 100 per cent of the building pre-leased to AGL for a 10 year term," Ms Lloyd-Hurwitz said.

Australand Property Group expects to lift its 2014 dividend by 19 per cent to 25.5c per security, managing director Bob Johnston told shareholders at its annual general meeting.

The quality of the business, underlying projects and current strong conditions in key residential markets provide the group with confidence on its medium-term outlook, he said.

Mr Johnston reaffirmed the property group's target of growth in operating earnings per security of 17 per cent to 20 per cent in 2014.

More to come