Lady in Blue’s revamp
Surfers Paradise office tower, following a $10m overhaul, has had a remarkable change of fortune
SHE once was referred to as the tall Lady in Blue but she turned out to be a money-consuming vixen to the people who courted her.
The latest courtier of the office tower at 50 Cavill Ave, Surfers Paradise, has succeeded in fixin’ the vixen’s ways.
The GDI Property Group, with a no-nonsense fellow called Steve Gillard at the helm, has spent $10 million on more than cosmetic surgery, almost filled her up, and today potentially is looking at a lusty balance-sheet bounty.
GDI paid $48.75 million for the half-empty 22-level tower in February 2016, tens of millions below its replacement value. By August this year it had taken the leasing level up to 90 per cent and it adjusted the value of the tower, held in the GDI Property Trust, to $77.6 million – not a bad boost in 18 months.
Since then it’s been trumpeted that the once-again glamorous Fifty Cavill Avenue is nudging 100 per cent let.
GDI bought the tower, which has 1.65ha of space, when it was netting $2.57 million a year – or on a 5.28 per cent yield.
Today that income undoubtedly has soared, given the success of the upgrade, the strength of new tenants, and leases at up to $450sq m net.
result is the property’s value, like its six elevators, will be heading even higher.
Yet to be determined are whether it will reach the bullish $100 million-plus peak to which its developer aspired 26 years ago.
Also up in the air is how long GDI will keep the Lady in Blue in its property bed.
GDI, which listed its stapled securities on the ASX in 2013, isn’t shy when it comes to realising a profit and moving on.
It last month sold a Sydney office tower at a $92 million premium to its 2014 cost.
GDI spent $216.25 million buying the Westralia Square property in Perth and, as with Fifty Cavill, is throwing millions into its modernisation program.
Fifty Cavill, a construction pacesetter at the start of the ’90s with its five levels of diaphragm-enclosed basement, was built by Kiwi group Corporate Equities, which had misplaced ideas about its value and eventually let it go at an embarrassing figure.
The king of Gold Coast ofThe fice towers was marketed by the group at $130 million.
It was eventually sold, five years later, for $48.5 million to Chinese buyers who quit it in 2004 for $55 million to one Albert Chung.
Albert, having already been burned to the tune of millions on Bundall’s Waterside office towers, lost control of the Lady in Blue to a mortgagee, with the debt on it and Southport’s Chung-held Seabank tower ending up with US group Goldman Sachs.
GDI came along with its $48.75 million cheque and hasn’t looked back on what has fast become a 22-level trueblue tall story.
THE ONCE-AGAIN GLAMOROUS FIFTY CAVILL AVENUE IS NUDGING 100 PER CENT LET