Sheraton Grand Mirage hits market with $200m price tag
The Sheraton Grand Mirage Resort on the Gold Coast has officially hit the market with a price tag of more than $200 million, as co-owner, embattled casino operator Star Entertainment Group, looks to further strengthen its balance sheet.
The five-star beachfront hotel opposite Sea World at Main Beach is 50 per cent owned by Star, with Hong Kong-listed developer and hotel operator Far East Consortium (the company behind the new Ritz-Carlton Melbourne that will open next week) and Hong Kong-based conglomerate Chow Tai Fook controlling 25 per cent each.
The JV partners acquired the hotel for $140 million in early 2017 with Star tipping $40 million of equity into the deal at the time.
Star and its Hong Kong-based partners are also the developers of the $3.6 billion Queens Wharf resort and casino in Brisbane.
Star has been quietly shopping around the 295-room resort for months, but has now appointed Sam McVay and Dan McVay of McVay Real Estate, Karen Wales and Steven King of Colliers and Adam Bury and Taylor O’Brien of JLL to offer it publicly via expressions of interest closing on April 21st.
Sale of the Gold Coast resort was flagged in February, at the same time as the debt-laden casino and resort operator unveiled a heavily discounted $800 million equity raising after reporting a statutory net loss of $1.26 billion driven by a $1 billion write-down of The Star Sydney.
Standing on a 3.45ha site across two parcels of leasehold land and offering more than 215 metres of beach frontage, the Sheraton Grand Mirage was one of two Mirage resorts – the other at Port Douglas – developed by the late businessman, Christopher Skase, before the collapse of his business empire and exile to Spain.
Alongside the 295 guest rooms and suites, there are also extensive conferencing and events spaces, dining facilities and parking for 300 cars.
Suited to a potential repositioning – the hotel management agreement with Marriott can be terminated early – the hotel will face competition in the coming years from a new Ritz-Carlton being developed by Ross Pelligra and Dion Giannarelli at Mariner’s Cove and due to open in 2026.
It joins the Intercontinental Sydney Double Bay, which has an asking price of about $240 million, as the flagship hotel offerings this year to date.
Since the start of the year, almost $1 billion of hotels have changed hands including mining billionaire Andrew Forrest’s $520 million purchase of Australia’s first Waldorf Astoria Hotel at Circular Quay.
A report by JLL identified $1.93 billion of hotel deals in 2022 (properties valued at more than $5 million).
While this was a 23 per cent decrease on the $2.52 billion that transacted in 2022, there were 51 deals in 2022, up from 46 in 2021.
“The Australian hotel market continues to attract significant interest from offshore capital, led this year by groups out of Hong Kong, Singapore, Indonesia, and the Middle East,” said Peter Harper, managing director and head of investment sales Australasia, JLL Hotels & Hospitality Group
“Pleasingly, some of the larger deals saw the entrance of first-time buyers into the Australian hotel market, injecting fresh capital into the space and demonstrating the attractiveness of our sector to global investors. These investors were sourced from JLL’s expansive platform across the region. ”
First-time buyers last year included Indonesian billionaires the Karim family, who paid almost $40 million for the leasehold to the Harbour Rocks Hotel in Sydney.
