Hotel magnate swoops on Surfers Paradise Hilton
NSW hotel magnate Jerry Schwartz has made his first foray into Queensland, buying the Hilton Surfers Paradise for just under $70 million, well down on its initial asking price of more than $80 million.
One of the newest five-star hotels on the Gold Coast, the twin-tower Hilton Surfers Paradise hit the market last July after its owner, private Chinese family group Ja Feng, had difficulty securing solid returns.
Dr Schwartz, who controls 14 hotels and is the largest private hotelier in Australia, says there is a year to run on Hilton’s management agreement.
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“The management agreement is to be discussed with Hilton to see if they can improve the profitability of the hotel,” Dr Schwartz told The Australian yesterday.
It is understood Ja Feng bought the 169-room hotel as well as four food and beverage outlets and 89 basement car spots two years ago for about $51 million.
Dr Schwartz says he is interested in the Gold Coast because it is a fantastic tourism area for children. “We have a unit on the Gold Coast and I personally think the Gold Coast is like the Las Vegas of Australia. It’s a major holiday spot and it’s a unique destination,” he says.
Dr Schwartz, whose assets include the Sofitel Darling Harbour, the Mercure Hotel at Sydney’s Central Railway Station and the Fairmont Resort Gallery in the Blue Mountains, says it is unusual for him to invest outside NSW but claims he has been driven to it in part by Cessnock Council.
The management agreement is to be discussed with Hilton to see if they can improve the profitability of the hotel
The hotelier has long said that profits from his Sydney CBD assets helped him prop up his regional operations but the Cessnock Council will not allow him to invest further in regional tourism infrastructure.
“I can afford my regional operations because of the profits of the city hotels,” Dr Schwartz said. “Instead of me putting money into Cessnock I am putting money into the Gold Coast.
“I am trying to improve the area and I try to do anything to help it.”
But Dr Schwartz says the council has recently knocked back his plans to build a hangar adjacent to the local airport for his fast-growing sea plane service.
He says he will resubmit his plans for a hangar and if the council knocks it back he will seek redress in the Land & Environment Court.
“The council has convinced me it is too difficult to invest in the area,” he claims.
The council could not be reached for comment.
The Hilton Surfers Paradise transaction is expected to settle in May. It was sold by Sam McVay of McVay Real Estate.
This article originally appeared on www.theaustralian.com.au/property.