Hilton Rescued

Written on the 5 June 2009

ANZ has banked on Brookfield Multiplex to deliver the resurrected $700 million Hilton Hotel project on schedule after original developer Raptis Group buckled with debts totalling $750 million.

BROOKFIELD Multiplex’s managing director of residential property George Kostas, affirms the project is on track to achieve a result that will deliver a much needed stimulus to the local community and rejuvenate the heart of Surfers Paradise.

Kostas told Gold Coast Business News that the two-stage project will create 2900 jobs, while $2.2 billion will be injected into the local and regional economy over the life of the asset.

This project has presented monumental challenges before getting out of the ground. Is BM up to the task?
Brookfield Multiplex is one Australasia’s largest integrated property groups with a history covering more than 46 years and a track record in successfully completing large complex projects. We have an exemplary reputation for projects being completed on time, on budget and to the highest quality.

There must be an enormous sense of achievement to bring a landmark project of this stature brought back to life. What were some of the biggest hurdles?
We are extremely proud of our achievement to date and absolutely delighted to be responsible for delivering this project successfully for all involved. There were various parties who had an interest in the project (and) it required us to quickly understand their respective issues and objectives so that we could design individually unique but ultimately an integrated solution to the problem. Time was also a very important consideration.

How difficult was it to source capital during this economic climate for a project of this magnitude?
It is a very large project requiring a significant amount of capital to see it through to completion. Our ability to provide a guaranteed delivery of the project supported by the strength of the group’s balance sheet was an important component in providing comfort to the bank. We worked very closely with the ANZ Bank to achieve this outcome. They were very supportive all the way through the process and wanted the best outcome for all stakeholders. This has been achieved.

Did the Hilton brand bring certain credibility to the project in terms of funding?
Hilton is an important participant in this project as they are a well established and highly visible brand that commands a high degree of respect and trust. They are a key reason why both Brookfield Multiplex and the ANZ Bank were able to achieve a level of comfort with the residential sales to date and the future prospects for the unsold apartments. Purchasers have the option to access a full range of premium hotel services as well as offering their apartments for rental by Hilton. This is quite a unique offer not typically seen in the Australian market and has been very popular with purchasers. Hilton was unwavering in its support both publicly and privately on this project and that has been a major factor.

What role has Gold Coast City Council played in ensuring the project’s future success?
Gold Coast City Council were very supportive and worked closely with us through the whole process to ensure we achieved a balance between the commercial considerations of the project and providing the maximum benefit back to the Gold Coast community.

How integral are developments like this in injecting credibility back into the Multiplex brand following the debacle over the troubled Wembley Stadium in the UK?
Brookfield Multiplex has an unblemished delivery record and is one of the most established and reputable property organisations in Australia.

How has this integrated property model set the benchmark for future developments in terms of partnerships?
This is a fantastic example of our integrated property strategy at work with various facets of our organisation working together to provide a smart, structured solution that has seen this landmark project brought back to life. In terms of partnerships for future projects such as this, Brookfield Multiplex has demonstrated that working together with financiers and property owners, you can achieve the right solution for financially distressed and capital constrained projects.

The Hilton Hotel will be one of the first upscale international hotels to be built on the Gold Coast in more than a decade. What will a hotel of this quality mean for tourism?
Economic data we received indicates that more than 2900 new jobs will be created and approximately $2.2 billion will be injected into the local and regional economy over the life of the asset. The project, including the hotel, is expected to provide a major stimulus to the Gold Coast economy.

How many sales have been generated since its launch?
Boulevard Tower (west tower), comprising 186 apartments over 32 storeys, is sold out.

Orchid Tower (east tower), comprising 224 apartments, is approximately 50 per cent sold.

Will this become a signature development for the company and are we likely to see a stronger BM presence on the Coast in the future?
This is a fantastic project for us as a builder and developer and we look forward to continuing our presence on the Gold Coast.


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