Cavill Avenue ‘city block’ sells for $346.5m in Queensland record

At the time, agents indicated Paradise Centre – home to 91 retailers and one of only three beachfront retail centres on the Gold Coast – could fetch between $260 million and $280 million, while the 408-room Novotel was valued at about $90 million.

The assets traded following an intensely competitive international expressions-of-interest campaign that drew deep offshore and domestic capital, with JLL citing interest driven by the asset’s “irreplaceability in the densifying heart of Surfers Paradise”.

“The campaign was extremely competitive, with a significant number of bids,” says McVay Real Estate chairman Dan McVay, citing Australia’s growth outlook and relative geopolitical security as key drivers of the offshore buyer mix.

When the asset hit the market last September, McVay described it simply: “It’s a monster. It’s a whole city block.”

Positioned at the intersection of Cavill Avenue and Surfers Paradise Beach, the assets represented one of the last true city-block opportunities in the precinct’s core – a footprint increasingly difficult to replicate as the strip densifies vertically.

“Mixed-use assets of this scale and quality rarely come to market in Australia … The depth of competition throughout the campaign underscored just how scarce opportunities of this nature are,” says JLL’s Nick Willis, executive director of retail investments in Australia & New Zealand.

The tourism mecca precinct draws between 12 million and 14 million visits annually – within striking distance of major regional malls such as Westfield Bondi Junction and Melbourne’s Chadstone, which attracts more than 23 million visitors a year.

Built in 1980 and given a $40 million spruce up in 2022, Paradise Centre comprises about 23,000 square metres of retail anchored by Woolworths and the world’s largest Timezone, alongside a heavy entertainment and dining mix geared to the Gold Coast’s late-night tourism economy, including venues such as The Sporting Globe and Surfers Paradise Tavern.

Other tenants include Starbucks, Grill’d, Zone Bowling and Australia’s first Wendy’s concept store from the US, reflecting its positioning as both a local and international drawcard, with 85 per cent of retailers national and international, as well as 491 basement car parks.

“Paradise Centre is Australia’s pre-eminent entertainment and dining destination … perfectly aligned to suit a strong tourism customer base alongside a rapidly growing trade area,” says Sam McVay, managing director of McVay Real Estate.

Agents say the centre outperformed industry benchmarks, with longer trading hours aligned to the Gold Coast’s late-night economy. It generates about $19 million in annual net rental income, and was almost fully leased with just one vacancy when listed, and is understood to reflect a yield of around 7 per cent.

The adjoining Novotel Surfers Paradise – the largest non-casino hotel on the Gold Coast – adds 408 rooms, including two multilevel penthouse rooms. The average room size is about 34 square metres, with direct beach and hinterland views, as well as conferencing facilities, a tennis court, a pool and a spa.

The vendors have invested significant capital to upgrade the food-and-beverage and retail offerings, with direct beachfront exposure.

The Novotel was positioned as a value-add opportunity, with vacant possession and recent refurbishment, including exterior works and balcony replacements. With lower floors upgraded to a four-star standard in recent years, Dan McVay initially suggested a further $20 million would complete works to the upper levels.

Agents say the deal’s appeal lay in its rare combination of scale, income and future upside – without development risk.

“In the current building environment, delivering new projects of this calibre is increasingly difficult,” adds JLL’s Sam Hatcher, head of retail investments in Australia & New Zealand.

“The Paradise Centre and Novotel offering provides immediate exposure to premium assets without taking on development risk.”

Willis says buyers are increasingly targeting diversified, income-producing assets that offer both stability and future optionality.

“Paradise Centre and Novotel delivered on all fronts,” he adds.

The campaign coincided with renewed capital targeting both the retail and hotel sectors, as investors have sought diversified income streams in supply-constrained markets over the past 18 months.

Adam Bury, executive vice president at JLL hotels and hospitality group, says hotel performance has rebounded strongly, with trading levels now materially above pre-COVID benchmarks and limited new supply expected in the medium term.

Bury says Australian hotel assets are increasingly viewed as both resilient and accessible relative to other Asia Pacific markets.

“There are few new projects likely to come online in the medium term … investors are increasingly bullish on assets, especially where value-add potential exists.”

The result reinforces the Gold Coast’s emergence as a core investment market, underpinned by nation-leading interstate migration, record tourism growth and major infrastructure investment ahead of the 2032 Olympic Games.

“Over the past decade, the Gold Coast has solidified its position as a core investment market … now seen as a major global city attracting significant local and offshore investment,” Hatcher adds.

That momentum is increasingly being reflected in the scale of projects proposed for the strip, including plans for a $1.5 billion Trump International Hotel & Tower nearby in Surfers Paradise, pitched as Australia’s tallest building and aimed at global luxury buyers.

If delivered, the 91-storey project would introduce a six-star hotel, high-end residences and luxury retail, further cementing Cavill Avenue and its surroundings as a focal point for international capital targeting Australia’s tourism markets.

The lifestyle destination is easily accessible, just 28 kilometres north of Gold Coast Airport, and about 80 kilometres south-east of Brisbane’s CBD.