On the QT: the major Gold Coast office sale that’s being swept under the rug

One of the city’s major office towers, is being offered around the traps in the quietest of fashions. Here’s why.

WHAT might be seen as an $80 million divorce could be looming in the lofty end of the Gold Coast office market.

The Rocket, one of the city’s major office towers, is being offered around the traps in the quietest of fashions.

There’s been no advertising, perhaps because the two owners don’t want to re-draw attention to a relationship that turned turbulent.

The 16-level tower, the giant of the Robina CBD, is jointly owned by the Sentinel and Clarence property groups, who bought it for $70.05 million in 2015.

They each put their 50 per cent stakes into property trusts they manage.

Things were harmonious until a dispute relating to the management of the Rocket led to a near two-year wrangle.

The matter ended up in court in late 2017 and saw Clarence win – with costs -- earlier this year.

The antagonists now have decided to end their joint venture and ‘launch’ the Rocket into someone else’s ownership.

It’s mooted that they hope to get at least $80 million for the property, with the lure of an annual net of around $6.3 million.

The income in part comes from a two-year rental guarantee on the 15 per cent of the building that hasn’t been leased.

It seems the Rocket has piqued the interest of several ‘would be’ buyers, with one tenant noting that there’s been quite a few ‘suits’ going through the building in the past 10 days or so.

WHY MIMI MACPHERSON’S HOME COULD TURN TO RUBBLE

The Rocket tower at Robina on the Gold Coast

AMAZING OFFER: GET A SAMSUNG GALAXY TAB A 8.0 WITH THIS BULLETIN SUBSCRIPTION (T&Cs apply)

The Rocket was built by the Robina Group as a strata-title property and completed in 2009.

One estimate is that it building was a $110 million exercise.

Robina Group strata-titled the building but the move was something of a damp squib.

The answer, in 2015, was to buy back, for a tad over $5 million, the half dozen or so titles that had drawn buyers and put the building on a saleable single title.

To say the Rocket has had a chequered life in terms of publicity is an understatement.

That publicity centres around five floors leased by Allconnex Water in 2009.

The city council, when it pulled the plug on Allconnex in 2012, inherited the water retailer’s $1.8 million a year lease liability.

The ‘pain’ eased when it sub-let the floors to Members Alliance, only to see that group fail in 2016 owing $1.1 million in rent.

The National Disability Insurance Scheme stepped in the following year and took a 10-year lease on four of the floors.

Its presence, with Federal Government backing, will add a bit of blue-chip glow to the Rocket in the eyes of buyers, as will the quality of some of the other tenants.

Meanwhile, Sentinel and Clarence aren’t alone in trying to sell a premier Gold Coast office tower.

The city’s biggest office building, Fifty Cavill Avenue in Surfers Paradise, is on the market and its owner, the listed GDI group, is believed to be chasing at least $100 million.

The 22-level tower, which is returning $6.7 million a year, is close to wearing the ‘full’ sign.

FIRST SNIFF

Gold Coast Suns - Sunland Group.

AMAZING OFFER: GET A SAMSUNG GALAXY TAB A 8.0 WITH THIS BULLETIN SUBSCRIPTION (T&Cs apply)

THE Sunland Group, which plans to redevelop the Greenmount Resort above Rainbow Bay in Coolangatta’s Marine Pde, is believed to have had a sniff at a site along the street before it was openly marketed.

The site’s home to the near 40-year-old Rainbow’s End unit six-pack, in which owners include former world surging champion Mark Richards.

It appears Sunland could have been interested but at less than $10 million and subject to getting a development approval.

SELL OFF

THE troubles won’t go away for Couran Cove Resort’s major property owner, Onterran, which has survived by doing a deal with its creditors.

The city council’s advertised that it’s going to auction 10 of the 93 units and villas owned by an Onterran subsidiary.

The move comes as Onterran, suspended from the ASX over unpaid fees, is in the process of selling several Couran holdings to Sydney-based EDG Capital which already has bought the resort’s management rights.

CAPITAL RAISED

GLEN White, a Mermaid Beach dweller who founded hacked valuation company LandMark White, has stayed away from a cash chase by the listed company.

Glen was sitting on a near 13 per cent stake in LMW before it embarked on a $5.4 million capital raising to repair a balance sheet hit by client information being stolen.

He refrained from buying more shares, at 8c each, in the raising and has seen his holding cut to 6.89 per cent.