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Gold Coast Business: $40m deal for former council ‘Taj Mahal’ site

A deal believed to be worth around $40 million could be poised to help thrust the Gold Coast office market into a flying start to 2020.

Surfers Paradise in the Gold Coast seen from the air

A DEAL believed to be worth around $40 million could be poised to help thrust the Gold Coast office market into a flying start to 2020.

It seems there’s an ‘off-the-plan’ contract on a building under way on land adjacent to the Robina train station -- a site once earmarked for the city council’s doomed ‘Taj Mahal’ headquarters.

The four-floor building is the first of three planned in the Acuity Business Park, being undertaken by the multifaceted Sydney-based Alceon Group – no stranger to the Robina office market.

Acuity Business Park. Picture: Supplied
Acuity Business Park. Picture: Supplied

The mooted buyer is the Raptis group -- and that’s not the listed ASX company controlled by never-say-die developer Jim Raptis.

No, this Raptis group is a private Brisbane entity founded by seafood king the late George Raptis and which owns the Niecon Tower and Niecon Plaza at Broadbeach.

The family business, which sold a Brisbane shopping centre for close to $60 million last year, apparently has been doing some homework on a possible new Gold Coast acquisition for some time.

Council had planned to transform the site at one time.
Council had planned to transform the site at one time.

The Alceon deal has surfaced as a fellow Sydney funds manager, Elanor, reportedly is on the verge of snaring the city’s premier tower, Fifty Cavill Ave in Surfers Paradise, for around $100 million.

That would be the biggest office block sale the city has seen.

Acuity Business Park’s Alceon, which seven years ago bought the Hammond Village manufactured home park at Coombabah, is run by a team which includes executives from the failed Babcock and Brown group.

It was a partner in the 2013 purchase of the Foxtel building at Robina, which was sold for $46 million three years later for a gross $13 million gain.

Acuity Business Park's Metricon building. Picture: Supplied
Acuity Business Park's Metricon building. Picture: Supplied

The ability to find an early buyer for the first of its Acuity buildings probably has been made easier by a sizeable leasing deal signed late last year.

Metricon, the Melbourne-founded home-builder that today has a major Queensland presence, has taken nearly 4500 sqm – or three floors -- in the 5937 sqm building.

Property sources suggest Alceon might have offered a 10-year rental guarantee on the 1500 sqm of uncommitted space.

The land before it was developed.
The land before it was developed.

It has plenty of time to end that obligation by finding a suitable tenant – the building’s not expected to be finished until mid-year.

The net income from the office block hasn’t been disclosed but the yield to the buyer is believed to be in the 6 to 7 per cent range.

Alceon, meanwhile, is chasing tenants for the second of its buildings, which is more modest in size at little more than 3600 sqm and only three floors.

The group bought the near-1ha Acuity site from the city council for $8 million a year ago, or nearly $2 million less than the council paid in 2010.

The council had earmarked it for a $224 million administration building but the plan was scrapped two years later when it spent a more modest $32.5 million buying the riverfront Waterside East and West office blocks at Bundall, a stroll from its Evandale offices.

Original URL: https://www.goldcoastbulletin.com.au/business/gold-coast-business-40m-deal-for-former-council-taj-mahal-site/news-story/a3a92f705bb3b27d997bf103000c8979