Jupiters owner Echo Entertainment Group Ltd (ASX: EGP) this week announced plans to build a new six-star facility at Broadbeach, while listed Chinese property giant Dalian Wanda Group looks set to proceed with the $970 million Jewel project and rebrand it the Wanda Vista resort.
But while Echo and Wanda are ramping up their investment in the city, Pearls Australasia is about to cash in its chips in what could be the biggest windfall profit on a Gold Coast property since Cromwell sold the Corporate Centre in 2007.
Cromwell made a gross gain of $53 million in less than two years on that deal, while Pearls could make upwards of $100 million in five years.
The Indian-backed Pearls has officially placed the Sheraton Mirage Resort on the market after an off-market campaign teased out a potential buyer earlier this year.
Pearls is expected to achieve a price of up to $200 million for the resort which it bought from receivers in 2009 for just $62.5 million.
Market sources say a price well about $150 million is the most likely outcome for the property which was bought at a time when the Gold Coast property market and confidence in the city had imploded.
The Indian developer, which has been heavily involved in apartment developments in recent years, has spent about $30 million refurbishing the resort and had planned a $60 million redevelopment for the resort that was to incorporate a boutique casino.
Mark Witheriff, of Knight Frank Gold Coast, and Dan McVay, of McVay Real Estate, have been assigned to sell the property through an expressions of interest campaign that closes on September 19.
The Gold Coast hotel market – along with the broader property market - has experienced a significant rebound in the past two years, buoyed by a resurgence in tourism and a rise in confidence generated by the 2018 Commonwealth Games.
“The weight of capital coming into the Gold Coast at the moment is heavy – it’s significant,” says Witheriff.
The Sheraton Mirage is understood to have been on the radar for some of that capital with a number of off-market offers put to Pearls.
Witheriff says the hotel resort is a completely different property to the one Pearls bought in 2009, and one with a more compelling business case.
“Pearls has added significant value to the Sheraton Mirage (pictured),” he says.
“Potential purchasers see it as a landmark beachfront property that can only increase in value and stature.”
The extent of Chinese interest in the Gold Coast property market has been highlighted by Dalian Wanda Group securing a joint-venture agreement with Ridong to develop the triple-tower Jewel project on a 1.1ha site on Old Burleigh Road at the southern end of the Surfers Paradise.
Wanda has taken a majority interest in the project, believed to be 55 per cent, triggering a 2015 start to development after almost four years on the drawing board.
The long delay has raised expectations for some time that Ridong was seeking a joint-venture partner to proceed with the project.
Wanda, which is the world’s second-largest real estate group worth about $70 billion, has revealed on its website that it plans to open a new Wanda Vista hotel on the Gold Coast as part of a rapid expansion of the five-star brand.
Wanda Vista is one of three brands in the group and currently has five hotels in China with plans to open another five this year.
The Gold Coast will be Wanda’s fifth hotel outside China and will incorporate serviced apartments.
Wanda emphasises the growth of Chinese tourism to the Gold Coast, which surged 24 per cent to 415,000 visitors in 2013.
“Wanda has quickened its overseas development in recent years and aims to build at least 15 luxury five-star Wanda Vista hotels in 15 international cities by 2020,” the company says.
The Jewel project is due to be completed in 2018.
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