Taiwanese Billionaire Buys Hotel, Retail Complex on Australia’s Gold Coast for $250M

Taiwanese billionaire Lin Chen-hai has purchased the Paradise Centre and Novotel Surfers Paradise on Queensland’s Gold Coast from Abu Dhabi Investment Corp and Challenger Life for $346.5 million ($250 million), in what brokers describe as the largest purchase of a combined hotel and retail complex in the Australian state.

Lin’s Forest Endeavour won a competitive bidding process for the Paradise Centre and Novotel Surfers Paradise, JLL and McVay Real Estate, which handled the sale, said in a statement. With the complex occupying a 2.3 hectare (5.7 acre) site across a two-lane street from the Surfers Paradise beach in southern Queensland, Paradise Centre attracts as many as 14 million visitors annually, while the Novotel Surfers Paradise is the Gold Coast’s largest hotel. 

The deal for the complex comes as international investors have begun to give more consideration to a tourist destination which had previously been the preserve of local resort investors, as Queensland expands its role in Australia’s economy.

“Over the past decade, the Gold Coast has solidified its position as a core investment market, underpinned by robust fundamentals including nation-leading interstate migration, record tourism growth and strategic infrastructure development, further strengthened by the upcoming 2032 Olympic and Paralympic Games,” Sam Hatcher, head of retail investments for Australia & New Zealand at JLL, said in the statement.

Upgrades Planned

The hotel and retail complex occupies most of a block fronting onto the Cavill Avenue pedestrian mall with  grocery chain Woolworths anchoring the retail element, which also features food and beverage operators such as Starbucks and Wendy’s. 

The Surfers Hotel has 408 rooms that average 34 square metres (370 square feet), the brokers’ statement said. According to Booking.com, a two-night stay from May 1 to May 3 in a deluxe double room for two people would cost A$589, including taxes and charges.

Brokers said the yield for the asset equates to around 6.5 percent after accounting for planned upgrades to the properties. 

“It will be a considerable upgrade to the bathrooms, the lobbies and the amenities and they will be making a significant investment,” McVay Real Estate managing director Sam McVay told Mingtiandi.

Exiting investors ADIC, which owned 75 percent of the asset, and Challenger Life, an Australian annuity provider that held the remaining share, bought what was then called Hotel Grand Chancellor Surfers Paradise for $80 million in 2016. ADIC and Challenger already owned the Paradise Centre and after the purchase Accor then took over the management contract and rebranded the hotel as a Novotel.

Bidders included a cross-section of overseas and locally that included institutions, syndicates, private equity funds, along with investors new to either the retail or hotel sector, McVay said.

“In Australia, it’s quite rare for mixed-use assets, with hotel and retail like this, to be offered together at the same time,” Nick Willis, an executive director for retail at JLL, told Mingtiandi. 

Queensland Focus

The purchase adds to the Lin family’s portfolio after Forest Endeavor earlier this year picked up an A$500 million portfolio of ten shopping centres on Australia’s eastern seaboard from Woolworths, according to a report in March. 

In Taiwan, Lin has grown his Pau Jar Group into one of Taiwan’s largest apartment builders since founding the company in 1991. In addition to its home market, Pau Jar Group now also has operations in Vietnam, China and Malaysia, as well as Australia, according to its website. 

Brisbane-based developer and asset manager Shahyer Group, which Lin controls through Pau Jar Group, in 2022 acquire the Homeworld Helensvale centre, a 23-kilometre (14-mile) drive away from the Surfers Paradise Novotel for around A$300 million The company has said that it plans to expand that retail centre, and also owns an industrial property in the area. 

Shahyer Group’s properties in Australia also include the 82-storey The One high-end apartment building in Brisbane, while the company is redeveloping Brisbane’s former Supreme Court and Melbourne’s former Pentridge Prison, a heritage-listed property, according to the company’s website.