Australia's Hotel Grand Central has signed a deal to sell the Hotel Grand Chancellor Surfers Paradise in Queensland for AUD$80 million (around USD$57 million) to financial services group Challenger, acting on behalf of an offshore group. The acquisition will be finalized when the buyer gets Foreign Investment Review Board approval.
The sale price was reportedly divided between AUD$77.41 million for the land and AUD$2.59 million for the business. Challenger owns the adjoining Paradise Centre on behalf of the same offshore investor, and allegedly considered selling the $240-million asset last year.
Hotel Grand Central purchased the 408-room Hotel Grand Chancellor Surfers Paradise in 2010 for AUD$47 million and invested an additional AUD$8.75 million on renovation works.
Challenger has so far declined to comment on the purchase, but reports indicate that global hotel companies including InterContinental, Accor and Starwood have contacted them to discuss management opportunities.
Why Everyone Wants the Gold Coast
The value of Gold Coast land has increased over the past few years as Chinese and Southeast Asian investors look for opportunities. Late last year, local hospitality real estate agent Will McVay said that a lower Australian dollar and an expanded direct international flight capacity into the Gold Coast had spurred “a considerable increase in the performance of hospitality assets, both from a domestic and international perspective.”
A year ago, we noted that transaction volume with Asian buyers in the region had surpassed $650 million year-to-date. Last summer, Brookfield Multiplex sold its Hilton Surfers Paradise Hotel for more than AUD$50 million to a private Chinese-Australian family after only three months on the market.
McVay Real Estate brokered the deal last year that saw Marriott Vacation Club return to Australia through the acquisition of the Surfers Paradise Marriott Resort and Spa on the Gold Coast for about AUD$85 million. Allan Vidor’s Toga Group and Greg Shand’s Barana oversaw the sale of the Vibe Hotel Gold Coast for about AUD$45 million to Hong Kong giant Kerry Properties
Meanwhile, a Singapore-based family bought the Crowne Plaza and Gold Tower at Broadbeach from Singapore’s Cockpit Hotels for an estimated A$70 million.