Gold Coast’s Paradise Resort saved as developer grabs a bargain
Hotelier Jerry Schwartz has snapped up one of the key assets of the collapsed Ralan Group at a $32 million discount.
Sydney-based Dr Schwartz paid $43m for the 2ha Paradise Resort on the Gold Coast, considerably less than the $75 million the Ralan Group, headed by William O’Dwyer, paid four years earlier. At that stage, O’Dwyer had developed one Ruby tower and had plans approved for development of a further three towers.
Instead of razing the resort, as Ralan proposed, Dr Schwartz plans to refurbish it.
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The acquisition lifts his portfolio of hotels to 15 across four states and territories. “I see myself as a white knight because I imagine most people looking at the site would have liked the (existing) DA for the development of three big towers,” Dr Schwartz says.
Grant Thornton was appointed administrator of Ralan earlier this year amid the collapse of the group, which developed budget apartment towers in Sydney and the Gold Coast. It left hundreds of investors and staff out of pocket.
The purchase of the 360-room hotel is the second Gold Coast resort for Dr Schwartz. He plans a major makeover, including upgrading rooms to a 4- to 4½-star standard. He expects to spend $15 million to $20 million on upgrading 260 rooms plus renovating the reception area and cafe.
“I know previous owners planned to knock down the resort and redevelop it for apartments, but we believe there is tremendous demand for quality family-friendly resorts, especially in prime locations,” he said in a statement to The Australian.
“I have taken over two other resorts — the Fairmont Resort Blue Mountains and Crowne Plaza Hunter Valley — and revived them as a result of diversifying their markets and enhancing their family facilities and attractions.
“Paradise Resort also has potential to grow further, and this purchase will give all those involved with the hotel certainty about the future.”
Dr Schwartz is optimistic about the Gold Coast market. “Both Paradise Resort and my previous purchase, the Hilton Surfers Paradise, have established very strong reputations, and with investment in both hotels, allied to sustained growth in Gold Coast’s domestic and international markets, I see considerable upside for both.”
He says the Paradise Resort, boasting one of the biggest resort waterparks in the southern hemisphere, is renowned as the number destination for families at the Gold Coast.
This article originally appeared on www.theaustralian.com.au/property.