Pub baron Arthur Laundy and fellow Rich Lister Theo Karedis are up against rivals including US-based Outrigger Hospitality Group in a bid to acquire the famed Sheraton Grand Mirage Resort on the Gold Coast from Star Entertainment Group and Hong Kong-listed Far East Consortium.
Numerous well-placed sources confirmed the Laundy and Karedis families, which jointly own a number of well-known beachfront hotels including the Manly Pacific and Crown Plaza in Terrigal, are one of the short-listed parties vying for the five-star hotel opposite Sea World at Main Beach.
Originally developed by the late businessman Christopher Skase, the 295-room resort spread across 3.45 hectares of leasehold land and offering 215 metres of beachfront hit the market in March with a price tag of more than $200 million.
Looking to knock out the Laundy-Karedis bid for the Sheraton Grand Mirage is Hawaii-based Outrigger, another short-listed party, according to the same sources.
Outrigger exited the Australian market in 2015 when it sold the management rights to its four Queensland resorts to then listed Mantra Group (now part of Accor) for $30 million.
In November 2016, Outrigger sold its entire global accommodation business – 37 properties including many in Hawaii and Thailand – to Denver-based KSL Capital Partners.
Since being bought out by KSL, Outrigger’s management has expressed a desire to return to Australia, in particular the Gold Coast.
Last year, Outrigger president and chief executive officer Jeff Wagoner said the company was “aggressively looking” to buy a beachfront resort of scale including the underlying real estate rather than just the management rights.
Outrigger’s owner KSL already has a number of hotel investments in Australia, including the 297-room Four Points by Sheraton Sydney and a major stake in boutique luxury accommodation group Baillie Lodges.
The Laundy and Karedis families – worth $1.4 billion and $952 million respectively according to the Financial Review Rich List – are also eager to expand their hotel portfolios after being an underbidder on the Sofitel Brisbane, which was sold to Singapore’s CDL in March for $178 million.
The Laundys have also been buying accommodation hotels on their own, including the 72-room Mercure Centro Hotel in Port Macquarie, which the family acquired for about $25 million last year.
Both families were contacted for comment, as was Outrigger.
Selling agents Sam McVay and Dan McVay of McVay Real Estate, Karen Wales and Steven King of Colliers and Adam Bury and Taylor O’Brien of JLL declined to comment.
The Sheraton Grand Mirage Resort includes 215m of beach frontage.
Vendors Star and Far East Consortium – co-developers of the $3.6 billion Queens Wharf resort and casino in Brisbane – acquired the Sheraton Grand Mirage for $140 million in early 2017 with Star tipping $40 million of equity into the deal at the time.
The sale of the Gold Coast resort was flagged in February, at the same time as the debt-laden casino and resort operator unveiled a heavily discounted $800 million equity raising after reporting a statutory net loss of $1.26 billion driven by a $1 billion write-down of The Star Sydney.
The Sheraton Grand Mirage was one of two Mirage resorts – the other at Port Douglas – developed by the late businessman, Christopher Skase, before the collapse of his business empire and exile to Spain. He died in 2001.
The Gold Coast has been one of Australia’s best performing markets in the post-pandemic phase with both occupancy rates (71 per cent) and average daily rates ($279) in the year to March higher than in the 2019 calendar year, according to a new report from Savills.
The strong bounce back in performance is driving offshore investment in the hotel sector. JLL Hotels & Hospitality’s global CEO, Gilda Perez-Alvarado said Australia was on every investor’s “bucket list”.
Article source: www.afr.com