This article is from the Australian Property Journal archive
MORE than three years after hopes for a $600 million dual tower project were dashed, Sunland Group has offloaded the Mariners Cove Marina in the controversial Gold Coast precinct The Spit for $28 million, to Chinese developer Ridong.
Because the property is Crown leasehold, the sale of the retail and marina precinct at 60-70 Seaworld Dr in Main Beach is conditional upon the consent of the Queensland Minister for Natural Resources, Mines and Energy. Sunland will proceed to seek Minister’s consent for the transfer of the term lease of the property to complete the transaction.
The $28 million sale price for the property represents a profit of $7 million for Sunland which will be realised in FY21. Settlement is due 14 days after consent is obtained but no earlier than 1st September. Ridong’s deposit of $2.8 million has been released to Sunland.
Sunland’s controversial proposal for the 44-storey twin towers, featuring 785 apartment and designed by the late Zaha Hadid, was revealed in the middle of 2015 and brashly flaunted The Spit’s development height limit of three storeys. Sunland eventually withdrew the unlikely project.
At the time of its listing, Sunland managing director, Sahba Abedian said the decision to take the Mariner’s Cove precinct to market followed the completion of The Spit Masterplan in May last year.
“With much of the Spit to be dedicated to new parklands and tourism infrastructure, Mariner’s Cove presents the last available opportunity to deliver a high-grade resort within the tightly held precinct.”
The Spit had long been touted as a billion-dollar cruise ship terminal site, generating heated discussion at local and state government level and was subject to multiple redevelopment submissions, including for a $3 billion integrated resort by ASF.
Mariner’s Cove is adjacent to the five-star Palazzo Versace Hotel, delivered by Sunland Group in 2000, and opposite the Sheraton Grand Mirage Resort. Sea World theme park is located about 1.8 kilometres to the north.
The state government’s masterplan for The Spit includes more than $200 million of commercial development, including retail, bars and dining, fresh seafood centre, new marina and waterfront precinct and an Aboriginal heritage centre. A $60 million commitment has been made by the state along with $50 million from Village Roadshow, which owns Sea World, and $35 million from Gold Coast City Council.
Earlier this year, Ridong ran into its own troubles with Gold Coast City Council. An application for a $160 million resort across 50 hectares in Tallebudgera was rejected earlier this year. Ridong was also one of the original developed of the $1 billion Jewel development, in a joint partnership with Chinese giant Dalian Wanda.
Warning on market volatility
Sahba Abedian said the sale was consistent with Sunland’s strategy to crystallise the current market value of non-core assets and inventory which does not form part of the group’s immediate, short term, portfolio requirements.
He also that Sunland is “unlikely to be immune from market volatility which may eventuate in the short to medium term” due to the coronavirus, and is reviewing costs previously capitalised on various projects.
“This may apply, for example, where development plans no longer meet the everchanging market demand, and a new development plan that meets market demand is required to be completed and approved by the local authority.
“Furthermore, Sunland notes completed inventory may prove more challenging to sell in the short to medium term having regard to the current market conditions.
“Consequently, Sunland may review the carrying value of certain inventory with a view to making any adjustments to net realisation value in accordance with accounting standards and policies applicable to the group.”
However, directors consider the group has generated enough cash flow for ongoing requirements, and proceeds reduced its working capital debt position.
In March, market volatility caused by the coronavirus pandemic forced the developer Sunland to abandon its $60 million off market buy-back plan.
Sunland’s sale of a Pimpama development site to GemLife for $29.7 million was recently settled.
