Tuesday, April 24, 2012

Gold Coast hotel Palazzo Versace for sale; Property buy opportunity of decade?


Palazzo Versace Hotels Luxury Gold Coast Fashion Property Brands

Palazzo Versace, the ultra glamorous hotel that put Queensland's Gold Coast on the international map at the start of the new millennium, is going on the market.

Owner the Sunland Group, which snatched a coup by opening the world's first fashion-branded hotel in 2000, is aiming to sell the Main Beach hotel to reinvest in other projects.

These could include building another property on the site of Mariner's Cove, south of Palazzo Versace, and an upmarket Brisbane apartment tower.

The new owner will have the keys to a property that has been admired around the globe since it was constructed nearly 12 years ago.

It is the ultimate entertaining venue, one where guests can be spoiled and feted in six-star luxury.

The hotel has had hundreds of famous guests since it first opened its doors, including the Rolling Stones, Paris Hilton, Sir Anthony Hopkins and Beyonce and Jay Z, and more recently Rod Stewart and Chris Brown. Ruler of the United Arab Emirates Sheikh Maktoum bin Rashed al-Maktoum passed away at the hotel in 2006.

Major features of the three-level landmark are 200 ensuite bedrooms, a 65m lagoon pool, luxury spa, high-tech gymnasium and marina.

The owner, in building this property, spared no expense, importing specially-designed Italian fittings and furnishings and flying in Italian artisans to undertake the intricate tiling and mosaic work.

The decision to sell the 200-room Palazzo Versace comes six months after Sunland regained 100 per cent ownership of the property in a deal with a Middle Eastern partner who acquired a 49 per cent stake seven years ago.

McVay Real Estate principal Dan McVay says he expects the hotel to bring at least $80 million.

"It's totally unique and will be seen as a trophy property, not just by hoteliers but by some of the world's wealthiest people," he said.

"There has been a never-ending trail of people wanting to buy the hotel over the years, virtually all of them from offshore.

"Hence I expect the buyer to be international, with Asian parties probably at the front of the queue."

Mr McVay, who with son Sam is marketing Palazzo Versace through an expressions of interest campaign, says he expects the hotel to sell well below replacement cost.

"The 200 rooms average 50sq m and at $80 million that equates to $8000 a sq m.

"For that figure you're not getting just 200 rooms - you also get three restaurants, a ballroom, shops, a gymnasium, a spa, a marina and other facilities."

Mr McVay says Palazzo Versace has performed solidly in the past year against the backdrop of what he regards as the worst market for hotel operators in more than 20 years.

"It's been making money and should net $4 million or more in the 2011-12 year.

"It's also being sold in pristine condition, having undergone a multimillion-dollar revitalisation in the last 18 months."

A Media Man analyst said "This Palazoo Versace purchase opportunity could very well end up one of the top luxury and property buys of the decade. For a company or individual looking to make a huge intentional splash into the property and / or high end luxury market, this is it".

Expressions of interest in Palazzo Versace will close in early June.

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