Pearls bought the Christopher Skase-developed property from Raptis Group recievers last year for $62.5m.

Many agree that prices are unlikely to jump overnight, but a gradual increase of 10% or more is expected, with even greater gains for developers amalgamating sites close to the new transport hubs that the project will create.  Already, a developers are sitting on a number of sites near the Gold Coast Convention Centre, and the project’s initial Broadbeach terminus, with hopes of large future capital gains.

This follows a challenge from the 2nd and 3rd mortgagees on the property who argued that St. George (the first mortgagee) didn’t have the right to sell the hotel business – just the land and the building.  With the sale proceeding, St. George will be the only mortgagee to recoup any money from the sale of the former Raptis Group asset.

Premium Income Fund, the second mortgagee are said to be considering an appeal.

Purchased by the Raptis Group in 2005 for $82m, the sale represents a small loss for St. George Bank – who are owed around $60m plus costs.  The main loss will be felt by 2nd mortgagee Premium Income Fund, whose unit owners will not see any of the $20m owed to them.

This is the first Austrlaian acquisition for Pearl Infrastructure Projects, who are expected to undertake a refurbishment of the hotel.

The first mortgagee, St. George Bank, is believed to be owed $60m plus costs on the beachfront Main Beach property

Set to be held in the Planning and Environment court in the next few months, the appeal aims to overturn the Gold Coast City Council’s decision.  Meanwhile, a group of local residents opposed to the development have raised over $130,000 to fund the legal fight against the development themselves.

Aiming to raise half a million dollars – a similar figure to that spent on the successful legal fight against the 5 storey ‘Tedder One’ development  – the residents, in conjunction with Council, feel they have a strong chance of success.

Despite close to 800 letters from Main Beach residents opposed to the deverlopment, it was ultimately rejected because it failed to meet 13 criteria – not least of all the area’s 3 storey height limit.

Mayor Ron Clarke has criticised the couple for attempting to use their wealth and reputation to avoid meeting the development criteria and has welcomed any court action they may wish to take against Council over the rejecting, stating that “I’d love them to, they’ve got no leg to stand on.”

The developer, Magic Millions owner and wife of Gerry Harvey – Katie Page – was overseas as the Main Beach Progress Association tabled 800 submissions opposed to the new building – written off as “bullshit” by Mr. Harvey.

Should Council approve the building, it will set an interesting precedent for the area – which at present is made up of a large number of older, 3 storey walk-up buildings, and could set  off a wave of redevelopment.  By the same token, given the level of opposition, a relaxion of the Town Plan could also result in a strong community backlash.

The property, purchased by the Group for around $82 million in 2006 could fetch in excess of $100m – which would make a significant dent in the $300m of debt the Group needs to repay in the short term.

The interested parties are primarily Australian, however there has also been enquiry from Asia and the Middle East.  Among them are Gold Coast businessman Craig Gore, who through his own group International Marina Development and Management has been in discussions with City Pacific to purchase the Mariner’s Cove Marina, opposite the Sheraton.