How Abu Dhabi bought the Gold Coast 2018 Commonwealth Games Athletes Village

THE Abu Dhabi Government bought the Gold Coast Commonwealth Games Village which was the epicentre of the GC2018 celebrations. Here’s how they did it.

RENTERS applying to live in the $500 million former Commonwealth Games Village, likely to fork out hundreds of dollars a week to live there, may be surprised to learn the owners are paying $1/year for the entire site.

It’s one of many quirks of the arrangement that has seen the former home of the Gold Coast Show and the local greyhound and harness racing clubs transformed into a development that’s as colourful behind the scenes as the neon facades of the buildings themselves.

A trots race at the Gold Coast Parklands before it was razed for the athletes village.

Despite widely-held belief to the contrary, the land is still formally owned by the State Government and held under a lease agreement to a company jointly controlled by developer Grocon and global investment bank UBS, but ultimately owned by latter.

For all intents and purposes, Grocon are tenants of the land, while UBS is the investor and owner of the 1251 apartments and townhouses in 18 buildings.

But who owns UBS?

UBS Group AG, is listed on the Swiss stock exchange and reported a net profit of $1.49 billion in 2017.

Its foray with Grocon into Australian real estate, specifically the Parklands project was made possible with majority backing from the Abu Dhabi Investment Council, an office of that government that’s effectively in charge of spending its leftover money.

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The Commonwealth Games Athletes Village is as colourful behind the scenes as its eye-catching facade.

Grocon boss Daniel Grollo gave one of few public confirmations of the deal near the bottom of a joint media statement with Premier Annastacia Palaszczuk in 2016, speaking of the legacy he was creating with the government “and our partners at Abu Dhabi Investment Council”.

The exact terms of the development agreement, struck in 2014 by the former LNP State Government, have never been made public, however lease documents obtained by the Gold Coast Bulletin reveal the companies are paying $1/year for the site.

The value of the residential land at Parklands was valued at $18.357 million at June 30, 2015.

In March 2014, when the government announced the deal, it bragged that it would slash the cost of delivering the village to $130 million - down from estimates well over double that.

By the end of 2015, the cost to the Government had already risen by more than $40 million.

Then-Premier Campbell Newman, unknowingly in his last term before being ousted by future Commonwealth Games Minister Kate Jones, said apartment sales would be staggered over 10 years to avoid impacting on the Gold Coast property market.

While the agreement was pitched as a win-win for taxpayers and politicians, the wins did not end up flowing to Grocon, which wound up its Queensland operations this year after losing a reported $20 million on the job as well as its licence to build in the state.

The developer was dogged by revelations it had made a secret request for the State to cover a major cost blowout, as well as cash flow problems that saw it delay payments to scores of subcontractors.

Small businesses who worked on the village say their final retention payments are due to be paid next month.