Surfers Paradise Retail Asset Changes Hands for $31m

A prime retail precinct metres from Surfers Paradise Beach has changed hands for $31 million.

Cavill Lane, a two-level retail complex comprising 28 tenancies, was acquired by The Property Factory and Boston Global from long-term owner Denwol Group after an expressions-of-interest campaign.

The 4344sq m asset is opposite the light rail station, which services more than 32,000 daily passengers, and about 200m from Surfers Paradise Beach.

The property is beneath and next to the five-star Hilton Hotel, in a vibrant dining and entertainment precinct.

Major tenants include Thirsty Camel, The Coffee Club, ANZ and Steampunk, as well as other food and beverage, entertainment, retail services and convenience outlets.

The property operates at 96 per cent occupancy by area and also generates income from an underground car park of 113 bays leased to Secure Parking, which has an estimated replacement value exceeding $149,000 per space.

According to Stonebridge Property Group, which handlded the sale, the investment offered a weighted average lease expiry of 5.6 years by area and annual rent increases ranging from 3 to 4 per cent, with 10 new leasing deals commencing from 2024 and averaging eight-year terms.

Stonebridge Property Group owner Carl Molony said “Cavill Lane offers significant income growth potential, with annual specialty rent reviews ranging from 3.00 to 4.00 per cent”.

▲ The precinct comprises 28 tenancies, including a mix of food and beverage, entertainment, retail services, and convenience retailers.

“The asset benefits from strong investment fundamentals, including a long WALE of 5.6 years by area, underpinned by 10 new leasing deals commencing from 2024 with an average lease term of eight years,” Molony said.

Stonebridge owner Philip Gartland said the property’s underground car spaces were “particularly valuable and rare for this location” and that there was “scope to add value through leasing repositioning as well as potential strata subdivision, subject to Council approval, providing future investment flexibility”.

The precinct is within a catchment of more than 330,000 residents within a 20-minute drive, and a population forecast to grow at 1.4 per cent annually to 2041.

The Gold Coast attracted 12.2 million visitors in the year to December of 2023, which was a 31 per cent year-on-year increase, making it one of Australia’s most visited destinations.

The sale comes as infrastructure investment accelerates ahead of the 2032 Brisbane Olympics, with the Gold Coast Light Rail extension, M1 Pacific Highway expansion, and Faster Rail Project between the Gold Coast and Brisbane set to enhance regional connectivity and investment appeal.