Prolific Sydney developer, hotel and pub owner Sam Arnaout has tipped the red-hot Gold Coast apartment market to remain strong for the next decade after revealing plans for an $800 million high-rise development on Broadbeach.
The biggest project in the Gold Coast suburb in 13 years, it will be the first Queensland project for Iris Capital, which generates revenue of $500 million a year from a $3 billion real estate portfolio that includes 28 Sydney and Hunter Valley hotels and pubs and 17 Ibis hotels bought from AccorInvest.
However, Mr Arnaout told The Australian Financial Review he had reversed earlier plans to enter the Victorian apartment market due to oversupply concerns.
“From a residential perspective, we are putting our energy into south-east Queensland and NSW.
“We have not ruled out an entry into Victoria, but at the moment we don’t think the fundamentals are right for us, given it’s so good elsewhere,” he said.
Mr Arnaout said his main concern with Victoria was a “massive oversupply” of apartments in a market that is reliant on demand from students and international investors, both of which have fallen away sharply.
Instead, he will focus his interstate efforts on transforming Broadbeach’s Niecon Plaza – purchased for $58 million earlier this year from the family of late seafood king George Raptis – into an $800 million mixed-use development featuring two residential towers rising 30 and 40 levels and more than 330 apartments.
The development, known as Victoria & Albert Broadbeach, will also include 5458 square metres of retail, dining and office space over two levels.
It will be the biggest project on Broadbeach since the completion of The Oracle apartments by the Nikiforides family more than a decade ago – the same family which built the Niecon Plaza.
Demand for Gold Coast apartments – especially larger, more luxurious residences – has soared since the start of the pandemic, driven by demand from downsizing owner-occupiers and interstate buyers taking advantage of the work-from-home phenomenon.
According to research house Urbis, the number of new apartments available to purchase off-the-plan on the Gold Coast fell to a seven-year low of 624 in the June quarter.
Mr Arnaout joins veteran developer David Devine, Queensland developer Chris Vitale and Rich Listers Tim Gurner and Max Beck in undertaking big apartment projects on the Gold Coast.
“The fundamentals on the Gold Coast are good. [Winning the 2032 Olympic bid] solidifies certainty for the region for the next 10 years,” Mr Arnaout said.
“There is plenty of demand for quality apartment product, which is what drew our attention to the region,” he said.
Mr Arnaout said Iris Capital would deliver a “first-class” project that would be unmatched on the Gold Coast and something “not seen or done before”.
“We are very confident we will create a landmark building.”
The East tower known as The Albert will comprise 114 two, three and four-bedroom apartments over 30 levels while the west tower, known as The Victoria, will rise over 40 levels and deliver 219 apartments of one, two and three bedrooms.
Both towers will be topped by two sub-penthouses and one penthouse each, while the Victoria tower will have a sky lounge for residents.
Amenities to be housed in a “podium club” on the fourth level will include a 25-metre lap pool surrounded by sub-tropical gardens.
The marketing of apartments in V&A Broadbeach will kick off at the end of October through Colliers. Construction is expected to begin mid next year and take two years to complete.
“It will be the first of many Gold Coast projects,” Mr Arnaout said.
Alongside the Broadbeach project, Iris Capital will continue to expand its $1 billion East End development in Newcastle (including a QT Hotel) as well as launch an upmarket project in Sydney’s Potts Point known as Queensgate – part of a pipeline of more than 2000 apartments.
Mr Arnaout said he was also looking forward to reopening Iris Capital’s pubs and hotels that have been in hibernation since the lockdown started in NSW.
The company employs 1200 people to operate its venues, including the Hotel Steyne and Ivanhoe Hotel in Manly and 17 accommodation hotels.
“It’s been very stressful for us. These places weren’t built to be closed,” he said.