Surfers Paradise icon hits the market: Paradise Centre and Novotel hotel listed on Cavill Avenue city block
If you’ve been to Surfers Paradise, you’ve been to Cavill Avenue, the beachfront tourism mecca synonymous with fun and home to the world’s biggest Timezone entertainment centre.
Now, at 2 Cavill Avenue, the retail precinct Paradise Centre and its hotel neighbour, Novotel Surfers Paradise, are for sale, offering a diverse investment with an asking price nudging towards $400 million.
Spanning 2.33 hectares, the property is located on the busiest corner of the Gold Coast, where the avenue meets Surfers Paradise Beach, a world-renowned destination that blends surf, sun and sustenance and attracts 12 million to 14 million visitors a year.
The lifestyle destination is easily accessible, just 28 kilometres north of Gold Coast Airport, and about 80 kilometres south-east of Brisbane’s CBD.
Described as the cornerstone of the Gold Coast’s most iconic precinct by joint listing agencies McVay Real Estate and JLL, investors can buy the assets together or separately.
“It’s a monster. It’s a whole city block,” says Dan McVay of McVay Real Estate.
He says 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 is valued at $90 million.
The campaign kicked off last week and has already attracted a great deal of attention, McVay says.
Two interested billionaires have toured the site, which has been offered to the market via ASX-listed Elanor Investors Group.
“It’s been really good. I think we’ve had sort of 10 good inspections. It’s going to go well,” McVay says.
“Traditionally, there aren’t a lot of people who can afford to compete in a market like this, but the amount of interest that we’ve had is really good. I’ve had four inspections myself, and they all have the money to buy it.”
“We’ve had some two very high-net-worth individuals, and another is an educational institution that’s just looking to invest some of their money. Another one is a Singaporean fund.”
Paradise Centre boasts long-term tenants, good cash flow and is almost fully occupied, which is unusual for such a large property, McVay adds.
Built in 1980 and given a $40 million spruce up in 2022, the precinct blends beachfront dining with entertainment, 85 per cent national and international retailers, and 491 basement car parks.
Anchor tenants Woolworths and Timezone “have been there forever”, McVay says.
The mall is home to Starbucks, Grill’d, Vans, TGI Fridays, Ben & Jerry’s and Australia’s first Wendy’s concept store from the US, along with Zone Bowling, Surfers Paradise Beer Garden, The Sporting Globe x Four Pines, and Surfers Paradise Tavern.
The centre delivers exceptional performance, outperforming industry benchmarks by 30 per cent, according to agents. It also runs 60 per cent longer each day compared to a standard Australian shopping centre, leaning into the area’s late-night economy.
The annual net rental income is around $19 million, with only one shop vacant, boasting a yield of around seven per cent, McVay says.
Meanwhile, Novotel Surfers Paradise – poised for value-add potential – can be sold with vacant possession, with major refurbishing underway, including exterior painting, and replacement of all balconies.
With the hard parts done by the current owners, all that’s needed is another $20 million to renovate the hotel’s top floors, McVay says, after the lower-floor rooms were updated to a four-star standard five years ago.
The hotel currently operates under an Accor management agreement expiring in October 2036, but investors may wish to split it into two halves: a high-end offering on the top floors, and a more accessible hotel on the lower floors, he adds.
“We suspect it might end up being two hotels in the one tower, sort of a mid-range in the bottom, and a luxury brand on the top. There aren’t too many luxury brands in Surfers Paradise, and there is demand, but luxury brands can’t be bigger than 200 rooms normally.”
Investors could alternatively convert the building to residential or mixed-use, with the Accor management agreement terminable upon sale, providing repositioning and rebranding freedom.
Recreational facilities on level five could be elevated to boost guest experience and command premium pricing, along with tapping into market gaps for upgraded meeting facilities and revamped food and beverage offerings.
“At $90 million, which is the price we want, it’s only $225,000 a key,” McVay says. “There’s no way in the world you could build a hotel in Surfers Paradise on land for $225,000 a key. Oh my God, it’s cheap. Cheap, cheap, and not nasty.”
The Gold Coast is undergoing a profound transformation, with continued high-rise residential development driving strong population growth while simultaneously reducing available land supply.
Surfers Paradise, the beating heart of the Gold Coast, has evolved into a tourism mecca since its humble beginning in the 1920s.
The suburb previously known as Elston grew exponentially after Brisbane hotelier Jim Cavill built the Surfers Paradise Hotel on this site, offering a private zoo, ballroom, and cabin accommodation.
Its popularity sparked a wave of development, and by the 1970s the site was home to the Grundy’s entertainment complex and its water slides, before Paradise Centre was born in 1980.
The properties are for sale together or separately via an international expressions-of-interest campaign closing at 2pm on Friday, October 3.
