Fri, Mar 8, 10:05am by Staff Writer
Macau casino boss Loi Keong Kuong and the former developer of the Gold Coast’s Jewel, Ridong’s billionaire boss Riyu Lu have joined forces to buy out collapsed Chinese developer Forise and its $1.2 billion apartment project Spirit in Surfers Paradise.
Forise, backed by its conglomerate parent in China, nearly collapsed through a wind-up by Queensland WorkCover last week for failing to pay its insurance premium, but it’s understood the consortium stepped in to bail it out in the eleventh hour.
It is understood a discounted sum of just over $50 million is being tossed around, a substantial discount to the $65 million purchase price of the site as well as capitalised project works.
Approval of the sale is required from the Foreign Investment Review Board, which will take months before a sale will be concluded.
If the deal progresses, the acquisition would extend Mr Loi’s real estate ownership in Australia.
The chairman of Macau’s Rio Hotel and Casino, who is fast becoming a key commercial property investor, already has a presence on the Gold Coast after purchasing the Soul Boardwalk shopping centre at the base of the $850 million Soul tower in Surfers Paradise last year
Mr Loi also paid $265 million for the commercial tower at 179 Elizabeth Street in Sydney and is the owner of ExxonMobil’s headquarters in Melbourne’s Southbank.
A buyout was required due to consultant and security fees, wages, unpaid office rent and commissions owed to agents including Ray White and Canford Property Group’s Roland Evans were among some of the debt looked at in a buyout deal.
The company’s troubles are believed to have stemmed from poor project and cashflow management.
It is also believed to have borrowed heavily from aggressive overseas private lenders to pay for the Spirit project.
The viability of the 89-storey Spirit came under scrutiny when Forise’s first apartment marketer The Agency pulled out of selling the apartments
Forise’s mistimed sales campaign hit the ground after foreign buyers starting pulling out of the Gold Coast.
Although no changes to current plans for the site have been made so far, Mr Evans told the Australian Financial Review he was confident the consortium would look after the project, creating a tourism icon for the coast.
Macau Rio casino boss and developer Ridong rescue collapsed developer Forise – The Australian Financial Review https://t.co/pSqjDhiHAn
— Australian Finance News (@Gander_News_b1) March 7, 2019
Canford Property Group’s Roland Evans was tasked with searching for a joint venture partner or a buyer off-market with Forise open to amending development plans at the site at 3 Trickett Street.
The DBI-designed 89-storey Spirit tower with 479 apartments is currently on the cards, touted as the Gold Coast’s tallest tower, but the development can also be altered to a mixed-use development comprising hotel, retail and residential space subject to council approval, Mr Evans said.
Sales of apartments were slow, with prices a steep as $32,000 a square metre at the top levels, equivalent to Sydney property prices, according to the Australian Financial Review.
Cambodia is fast becoming a hot spot of gambling in Australia, with the beach town of Sihanoukville one of a number of towns that are luring wealthy Chinese gamblers.
This coastal capital of Preah Sihanouk province – named after Cambodia’s revered late king – was once a sleepy fishing community before being claimed first by Western backpackers, and then wealthy Russians.
Today it is Chinese investment that is transforming the province into a gambling playground for mainland tourists.
“Some gamblers lose hundreds of dollars in less than 20 minutes,” an employee from a casino told Business News.
Casinos are banned in China, although the gambling mecca of Macau, once dubbed the ‘Las Vegas of Asia’ has special laws allowing a massive gambling trade.
Sihanoukville is becoming a popular alternative, with nearly 50 Chinese-owned casinos and dozens of hotel complexes under construction.
30 per cent of Sihanoukville’s population is now Chinese according to the provincial governor, with population swelling during the past two years.
The Chinese government has invested big time in Cambodia, with the once-impoverished southeast Asian country having billions of dollars flow into its economy.
Preah Sihanouk’s governor said $1 billion has been invested by Chinese government and private businesses into the region between 2016 and 2018.
China’s influence in Cambodia is highlighted by the nexus of Beijing’s ‘One Belt, One Road’ infrastructure plan, that includes a planned highway to Cambodia’s capital Phnom Penh.
Real estate prices in the town have skyrocketed in the past two years, rising from $500 per square metre to five times that for homes close to the sea according to real estate firm CBRE.
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