Surfers Paradise luxury tower price adjustment talks between pre-sold buyers and developer

Developers of a fast-selling three-tower project are talking to buyers about price changes after the fact so it remains viable. See where and why

The Paradiso Place triple towers project is being price adjusted upwards to remain viable.

Surging construction costs have hit a fast-selling luxury Surfers Paradise three-tower project, prompting developer talks with buyers about price adjustments to remain viable.

Developer SPG Land says the costs mean the Paradiso Place development is not feasible at original prices and it is engaging with buyers over the changed situation.

At the same time, it says it is in talks with a major builder and is committed to starting the project.

SPG has released a statement on the heels of speculation it might have to ask Paradiso buyers for more money.

The statement indicates there might be price adjustments for some of the sold apartments.

Stage one of the first tower, promoted through the southern hemisphere’s largest sales and display suite which cost $4 million, has been a $160 million sellout.

Stage two of what initially was touted as a $940 million landmark development has been launched.

Paradiso Place.

John Muchall, Gold Coast valuations director for JLL, this week said the Paradiso situation was no surprise given the rate of increase in material and labour costs in the past year.

“We have seen a similar situation with other projects – it’s nothing new – and Paradiso is unlikely to be the last one affected.

“Such scenarios will be giving buyers some concern too.”

SPG’s statement said due to a significant increase in construction costs, the group had been forced to carefully review its feasibility for Paradiso Place.

“Unfortunately, despite our efforts, it is no longer feasible for us to proceed with the project as originally priced in the contracts we signed with early buyers.

“As we remain committed to deliver Paradiso Place, we are having discussions with the affected customers to provide a pathway for them to proceed with their purchase in a manner feasible for the continuation of the project.

Paradiso Place developers in Surfers Paradise are blaming surging construction costs for talks with pre-sold buyers about price adjustments.

“We are negotiating a building contract for the project with a respected builder and it has been confirmed through extensive due diligence (as part of this negotiation) that the significant increase in construction costs has resulted in the project no longer being feasible as originally priced.

“We remain committed to the delivery of Paradiso Place according to its award-winning design and with a high-quality premium living experience and world-class amenities.

“We hope the delivery of Paradiso Place will assist with the property shortage in the market, provide for new retail tenancies and retail employment opportunities being created for the community, and generally promote and enhance economic activity in the community.”

SPG Land said it believed the construction cost situation it faced had affected many off-the-plan residential developments in Gold Coast and Queensland.

The SPG's Paradiso Place towers features stunning amenities in the midst of Surfers Paradise.

SPG Land, headed by David Wang, bought a 1.15ha full city block fronting the Gold Coast Highway and Ferny Ave from South Korean carmaker Hyundai for $28 million in 2021.

It went on to announce Paradiso Place, a ‘destination’ which would provide 792 apartments in towers of from 38 to 42 storeys, each with its own identity and resident amenities.

The project also would include retail space and public areas.

The SPG group, which opened the Peninsula Hotel in Shanghai in 2009, previously had been a partner in the 386-title Cambridge Residences at Robina.