Troubled Queensland resort Dunk Island has been purchased by Sydney music entrepreneur Mark Spillane in a deal worth $20 million.
Dunk Island, one of only three freehold islands on the Great Barrier Reef, is 4km east of Mission Beach in Far North Queensland.
The 4.5-star Dunk Island resort was an internationally-famous destination with 160 rooms, a nine-hole golf course and a number of restaurants, before it was severely damaged by category five Cyclones Larry in 2006, and Yasi in 2011.
New owner Spillane is the co-founder of Upsense Capital. He has had a long career in live music, television and film production as well as finance, artist management and entertainment industry consultancy.
Spillane said he wanted to bring new life to the derelict island through a range of initiatives.
“We look forward to working closely with the community, regional and state governments, and other key stakeholders in planning a sustainable development,” Spillane said.
JLL Hotels & Hospitality Group agents Andrew Langsford and Nick Roche handled the sale on behalf of the Bond family.
“This deal is a clear demonstration of the capital depth in the Australian hotel and resort market, and we anticipate our appeal as an investment destination will only increase as domestic travel continues to soar,” Roche said.
The island is divided into three—a national park area, a freehold area and the council-owned spit which is used for low-impact activities such as camping.
It was previously owned by Qantas and cruise company P&O before being acquired by Linc Energy founder Peter Bond in 2011 for $7.5 million shortly after Cyclone Yasi.
Bond founded underground coal gasification outfit Linc Energy, which was once valued at $1.1 billion, but the company collapsed in May 2016 with debts of $320 million.
The property was then sold to Australia-based Mayfair 101 in a $31.5-million deal in 2019.
The company, headed by managing director James Mawhinney, sounded out $1.6-billion plans to redevelop the island, with the group’s investor-facing brand, Mayfair Platinum, raising more than $100 million to finance the project.
Mayfair 101’s plans included a new golf course, three resorts on Dunk Island and another on the mainland, as well as renovating a nearby airstrip to become an international airport.
Maywhinney also pledged to purchase more than 200 properties on the mainland at Mission Beach to support the ambitious redevelopment.
The following year, the Australian Securities and Investments Commission took action against financial products offered by Mawhinney’s companies.
The corporate regulator, which has been investigating Mawhinney and his investment group for three years, obtained a court order freezing the assets of several entities associated with the project and banning Mawhinney from leaving the country.
ASIC alleged the products were marketed via “misleading” and “deceptive” advertisements and websites.
Soon afterwards Mayfair’s property purchases in Mission Beach—of which about 130 had settled—were suddenly put on hold and Dunk Island was repossessed.
Solicitors for Mayfair’s property venture contacted sellers, blaming the global impact of the coronavirus pandemic for its inability to fulfil its obligations.
In August 2020, the island was reclaimed by the Bond family’s company, Family Island Operations.
The Bond family argued that Mayfair had not made scheduled payments, which gave it the right to take back control and offer the resort for sale again, albeit at a lower price in the wake of the coronavirus crisis.
In April, Maywhinney was restrained by the Federal Court from fundraising and advertising financial products for 20 years.