No sooner had the ink dried on the deal for a Chinese consortium to purchase the 11,000sqm Pacific Beach development site in Surfers Paradise than an obstacle appears to have surfaced.

Foresight Acquisitions, which amalgamated and jointly owns the property with City Pacific has placed a caveat on the sale of the property which could delay or prevent settlement.

Foresight has launched a claim in the Supreme Court for $25m from the now-failed City Pacific.  They are seeking damages for lost profits as a result of City Pacific’s failure to see the project through to completion.

After months in limbo, the jointly Foresight Acquisitions and City Pacific-owned Pacific Beach site in Surfers Paradise has reported been sold.

A Chinese consortium beat local developer Sunland to the property – but at this stage a price has not been disclosed.

The 11,000sqm site on the corner of Wharf and Old Burleigh Roads is the largest beachfront site amalgamated in recent years and the sale represents a significant expression of confidence in the local market.

Whether the Chinese group will continue with the existing approved development plans or apply for changes is not yet known.  One interesting fact is though: The group has obtained approval from the Foreign Investment Review Board to sell 100% of the project to overseas buyers (as opposed to the usual 50%) – suggesting that they plan to make a considerable number of sales in their home market.

After weeks of bitter legal battles, Balmain Trilogy has been awarded control of City Pacific’s First Mortgage Fund after the Federal Court handed down a ruling on the matter.

While the move will directly affect the unit-holders in the $630m Fund, it also raises questions about the future of City Pacific’s real estate holdings: most notably King Tide on Broadbeach Boulevard and the Pacific Beach beachfront site on Old Burleigh Road.

With the significant interest bill taken into account the two sites are estimated to owe the company in the vicinity of $220 million.  The Pacific Beach site has been on the market for several months and it has been widely speculated that King Tide will follow.  However, given the current state of the Gold Coast property market and the relatively small buyer pool for large development sites, any sale of either of these sites is likely to represent a significant loss.

In the wake of a collapsed $205m with a Korean company last year, and following increased pressure from financier Fortress Credit, City Pacific have placed their 11,000 sqm beachfront site on the corner of Old Burleigh and Wharf Road back on the market.

Assembled at a cost of over $100m in 2007, the site is believed to owe City Pacific and Fortress a figure approaching $200m.  However, following recent falls in the value of beachfront property, it is widely expected that any sale – whether it be the entire site in one line, or broken into portions – will leave a significant shortfall.

City Pacific has reportedly negotiated a contract to sell their 11.3 hectare beachfront site in southern Surfers Paradise.   The buyers are believed to be a Korean group, and the price tag somewhere in the vicinity of $205million.

At this stage, the contract is still subject to approval from the Foreign Investment Review Board.

As such future of (what is currently) the largest beachfront site ever amalgamated on the Gold Coast (at an original cost in excess of $100 million) remains uncertain.   Should the current contract result in a sale, it remains to be seen whether the new owners will make use of the existing Development Approval for a 36 and 41 storey tower plus villas on the site, redraw the plans or simply land bank the site.

After several days of negotiations with three parties, it is anticipated that City Pacific will announce the sale of some of their assets later today.  The sale is expected to include the 11,000 square metre Surfers Paradise beachfront site that the company amalgamated last year with local developer Craig Perry’s Insight group.

At this stage, the identity of the bidders has not been confirmed, although it is speculated that Sunland and Mirvac – City Pacific’s joint venture partner on the $1bn Gainsborough Greens development are among them.   Details of the deal should become available by the end of the day.

Since Tuesday’s suspension in share trading, City Pacific has reportedly been in discussion with three possible buyers or joint venture partners for a number of it’s assets.

The company, which owns either fully or jointly, a number of large development sites on the Gold Coast, including Mariner’s Cove and the Gold Coast International (with the Raptis Group), the $100m Surfers Paradise beachfront Pacific Beach site and the King Tide site in Broadbeach, is believed to need to raise some funds in order to repay a number of debt commitments, notably $240 million to the Commonwealth Bank.

After months of going back and forth with the Gold Coast City Council, City Pacific Ltd have received development approval for their mammoth 9500 square metre beachfront development site.

The site, which extends north from Wharf Road and encompasses around 115m of absolute beach frontage has been given approval for two residential towers, 41 and 36 stories in height.

To coincide with the announcement, the entire site has been fenced off and demolition work is expected to commence shortly on (what will soon become the former) Paradise Sands Resort and Oriana.

More information will be posted as it becomes available.