Deal to buy Palazzo Versace for $114m falls over as staff, residents told owners are no longer selling

The future is unclear for the Gold Coast’s most prominent luxury hotel. Read the latest on its sale.

A $114m deal to sell the Gold Coast’s most prominent luxury hotel has stalled, but another high-profile buyer is about to pounce.

Shakespeare Property Group had planned to buy the Palazzo Versace hotel at Main Beach, however staff and condo owners of the hotel have been told the deal has been terminated.

A spokeswoman for Melbourne-based Shakespeare, the commercial property arm of Prime Value, declined to comment on the negotiations, which are understood to have reached an impasse in September.

Palazzo Versace is reportedly still on the market.

A staff member at Versace, who did not wish to be named, said the sale was not going ahead.

“We were told by the owners a few weeks ago,” they said.

“It’s just business as usual for us now.”

The resort is currently owned by China’s Dong Run Group, which acquired the 200-room luxury hotel for $68.5m in 2012, through Nanbai Australia, a company set up by the group’s chairman Jing Lin Zuo.

The purchase included several other Chinese and Australian-based shareholders.

Other luxury hotel groups, including Hilton Worldwide, are now believed to be in discussions to buy the 22-year-old hotel.

Insiders say Hilton has advanced plans to add the property to its Waldorf Astoria stable and has estimated it could cost $58m to renovate the hotel.

It could be reborn under a new name by mid next year.

It would be Waldorf Astoria’s second Australian hotel after it announced in April it would launch at Sydney’s One Circular Quay development.

Palazzo Versace, Gold Coast, Australia. Picture: Supplied

Any buyer is likely to grapple with an expensive rebrand as Milan-based House of Versace, which the Bulletin was unable to contact, is understood to have decided not to renew its branding deal.

If the resort loses its Versace name, the complex’s new owners will have to remove the fashion company’s works – including thousands of Medusa tiles embedded in the walls and floors of every room.

A real estate source told the Bulletin the failed sale of the resort had come as a shock: “It was a real surprise, this was thought to be a done deal so the move has surprised us.”

The Bulletin has contacted JLL Hotels & Hospitality, which has been trying to sell Palazzo Versace for nearly a year, for comment.

Cabana at the Palazzo Versace Hotel. Picture: Destination Gold Coast

The five-star hotel – which has hosted U2’s Bono, Beyonce and Jay Z, Baywatch icon Pamela Anderson and Snoop Dogg – recently underwent a multimillion-dollar refurbishment.

Shakespeare Property Group controls a $1bn property portfolio across Australia including several Queensland hotels such as Novotel Twin Waters Resort on the Sunshine Coast, Pullman Cairns International and Novotel Oasis Resort Cairns.

Palazzo Versace was the brainchild of developer and Sunland Group founder Soheil Abedian, who approached the Italian fashion house in 1997 with the idea of a Versace-branded hotel. It opened at Main Beach on the Gold Coast in 2000 and has since attracted the world’s wealthy and a host of celebrities.

Gold Coast's Palazzo Versace Hotel.

Among the hotel’s quirky Versace-specific features is the chandelier in the main foyer, which was previously owned by Gianni Versace himself.

The carpet in the ballroom is made up of a single 400 sqm piece which has a unique design without any repetition in its pattern.

Its opening, on Friday September 15, 2000, coincided with the opening ceremony of the Sydney Olympic Games.