Chinese player set to bid as Surfers Paradise wins back investors

A wealthy Chinese individual is poised to make an offer of close to $100 million for the retail ­complex on the Soul Surfers ­Paradise tower on the Gold Coast as the precinct wins back investors and financiers

 Soul Boardwalk - the landmark retail complex located at the iconic Soul Surfers Paradise tower. Source: Supplied

With first-round bids closing today for the ownership of retail stores in beachside Soul, sources close to the Chinese businessman, who is based in Shengdong, confirmed an offer was made that would equate to a yield of about 8 per cent.

PwC, appointed receivers and managers of the 77-level tower in 2012, after developer Juniper Group went into administration, has also fielded interest from local groups for the asset.

While the tower, at 4 The Esplanade, is mostly filled out with opulent apartments and hotel rooms, it has three levels of strata retail totalling nearly 7000sq m as well as 181 basement car spaces.

Tenants include Hurricane’s Grill, Pancakes on the Rocks and Ripley’s Believe It or Not.

PwC and the agents on the deal, CBRE’s Jonathan O’Brien and Rem Rafter and Mark Witheriff and James Branch of Knight Frank, have declined to comment.

The hot interest in the asset signals a turnaround for the troubled development.

Hong Kong gaming billionaire Tony Fung paid $7m for a four-level penthouse atop the Soul tower at auction earlier this year. Mr Fung paid $1m above the ­reserve.

The tycoon is pouring capital into the area. He has struck a deal to buy the Sheraton Mirage on the Gold Coast for $160m and plans to turn it into a luxury casino resort. The Hong Kong tycoon also outlaid $45m on a site on The Esplanade at Surfers Paradise to build a 750-room tower to rival the landmark Q1 tower. There are also reports that the ASF Consortium is in talks to buy a parcel of land on Seaworld Drive as it pursues separate plans to ­develop a casino. Listed developer Sunland is also advancing plans for a luxury 450-apartment ­complex along the strip.

Other domestic players have been active. Earlier this year hotelier Mantra Group bought the management rights to the hotel part of the Soul tower, which it will manage through its luxury Peppers brand. Nearby, work has begun on the $970m Jewel development by China’s Dalian Wanda Group and Ridong Group. Ridong last month also bought the nearby Surfers Royale building, where another luxury residential development is planned.

The three-tower Wanda and Ridong project is seeking significant finance from local and international banks, with plans to meet with potential backers in the hope of raising about $800m and closing a deal next month.

The hotel market has been running hot with a private Singapore-based family office securing the Crowne Plaza and Gold Tower at Surfers Paradise from Singapore’s Cockpit Hotels for a rumoured $62m. McVay Real ­Estate brokered the deal.

At this pricing the deal would show a tight yield in the mid-5 per cent range with the opportunities to add value, including by developing a 47-storey tower, or introducing new branding, with the property potentially suited to Novotel and Sebel branding.

Sydney apartment developer William O’Dwyer has lodged plans for the first stages of his 2300 residential apartments across a ­couple of city blocks in Surfers Paradise after spending more than $94m on two sites in his first foray into the area.

Source: The Australian  Greg Brown & Ben Wilmot  June 4th 2015