Gold Coast Soul Boardwalk retail precinct sells for $90m
One of the Gold Coast’s premier beachfront retail and dining centres has been taken off the market after receiving a $90m offer, just three years after a buy was passed up for $12m less.
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THE saying ‘time is a great healer’ could well be amended to ‘time is a great earner’ for two offshore mortgagees who benefited from the Gold Coast’s third biggest property deal of 2018.
The property in question is the Soul Boardwalk retail and dining centre fronting the ocean in the heart of Surfers Paradise.
It was the last Soul asset held by receivers who took control of the Juniper-built tower in 2012.
The receivers hoped the Boardwalk might walk out the door in 2015 when they put it on the market in the hype leading up to the Commonwealth Games.
It apparently drew plenty of interest and reportedly there was a buyer prepared to pay $78 million.
That offer figure was given the thumbs down by the mortgagees, Bank of America and Hong Kong’s Pacific Alliance group, and the Boardwalk was taken off the market.
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Move forward to June this year and the retail and dining centre sold for $90 million to a Macau casino chief, a figure surpassed in terms of 2018 Gold Coast property deals by the Future Fund selling its 25 per cent in the Harbour Town shopping centre for $180 million two
weeks ago.
Another $100 million-plus deal has settled but won’t be revealed for another week.
Loi Keong Kuong’s Soul buy was part of a 2018 spending spree that saw him buy a Sydney office tower for $265 million and the ExxonMobile HQ in Melbourne for $160 million.
The $12 million jump in Soul Boardwalk’s value between 2015 and 2018 reflects a serious effort to hoist the leasing level.
When it first was marketed, 82 per cent of the space in the three-level centre was leased and net income was $6.1 million.
By the time it went back on the market earlier this year, the property was close to being fully leased and on the verge of netting $7 million.
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The new landlord, owner of Macau’s Rio casino, has bought at a near 7.5 per cent yield — one which can be lifted to approaching 8 per cent by attaining 100 per cent occupancy.
The yield, which compares with a 5.08 per cent figure achieved for the Coles-anchored Benowa Village centre, probably is a reflection that the Boardwalk doesn’t have what the industry calls an anchor tenant.
In other words, there’s an absence of a blue-chip major, such as a full-blown supermarket.
Boardwalk’s Loi Keong Kuong instead has a tenant line-up with a heavy food slant and which also includes the likes of Ripley’s Believe it or Not.
Also paying him rent, unsurprisingly given the Boardwalk’s adjacent to the surf, are Quiksilver, Rip Curl, Surf Dive n Ski, Roxy and Sunburn.
Meanwhile, it will be interesting to see whether Loi Keong Kuong has his eye on any other Gold Coast assets.
Who knows, given that his Sydney buy shows he has a penchant for office towers, he might be eyeing the Gold Coast’s premier one.
Fifty Cavill Avenue in Surfers Paradise, which is for sale, is a vastly different beast in quality and leasing terms to when it sold half empty for $46 million in 2016.
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