Chinese buyers await FIRB approval to secure Palazzo Versace

Two Chinese companies have struck a $68.5 million deal with Sunland Group for the world’s first fashion house-branded hotel, Palazzo Versace.

Property Observer reported three weeks ago that offshore Chinese investors were eyeing up the hotel, with the market tipping $60 million plus.

 The Chinese investors include a construction group and a travel company, but the $68.5 million deal is awaiting approval by the Foreign Investment Review Board.

 The deal comes with a twist, as the Chinese pair will have the ability to turn out more Versace-branded hotels if approved by the Versace powerhouse and the FIRB.

The Gold Coast offering ranked as the world’s first fashion house-branded hotel in 2000.

Marketing for the hotel began back in April by Sam and Dan McVay of McVay Real Estate, where the hotel was first expected to sell close to $80 million.

 Upon approval of the sale, the proceeds will first pay off a debt of $27.4 million on the property.

 The hotel is being sold by property developer Sunland in order to reinvest in other projects.

 “Palazzo Versace was very significant in the history of Sunland,”Sunland Group managing director Sahbah Abedian told the Gold Coast Bulletin.

 “Our strategy has always been threefold, to continue to consolidate our capital management through our share buyback program, to maintain a conservative balance sheet and to organically create our portfolio.”

 “This allows us to have no debt at all on our balance sheet and to look to further acquisitions,” says Abedian.

 The official announcement suggested settlement of the sale was anticipated for November 30.