Gina Rinehart is the latest to have backed out of the purchase of Great Keppel Island Resort

Queensland is blessed with beautiful islands that are ready-made stars of multimillion dollar tourism promotions. But who would want to own one?

Australia’s wealthiest woman Gina Rinehart has pulled out of the purchase of an approved resort on Great Keppel Island and the transfer of leases from owner Tower Holdings to develop it.

The initial deal revealed about six months ago was rumoured to be around $50m but GKI Investments, owned by Ms Rinehart, pulled out not citing a specific reason for why it walked away.

But for industry insiders there are plenty of reasons not to buy the resort which has been on and off the market for at least a decade.

“It’s a truly stunning part of the world but extensive island developments have not worked,” said one insider who refused to be named.

“They also have a bad record with cyclones and all the other stuff. Let’s face it, there’s only ever going to be one Hamilton Island and no one has the fortitude to try and do another.”

At the time Ms Rinehart confirmed she is working towards the purchase of the leasehold of the Great Keppel Island Resort, she had plans to make it “world class” resort subject to a “myriad of state and local government approvals”.

“We hope to be able to make it better than it has ever been, with a world class year round beach club, sandy bars, shopping and more experiences circling around a marina modelled after successful marinas like Puerto Banus,” she said.

“We envision a year round swimmable beach club and an underwater bar being able to bring the benefits of overseas tourism to Australia.”

Current development approvals for the island, off Yeppoon, include a 250-room beach front hotel, 300 luxury apartments, 285 luxury villas, 9000sq m of retail shops and a 250-berth marina. The airstrip also has approval to be extended from the current 800m.

That approval is weighed down by 60 pages of lease conditions plus pages of development approval conditions and any “out of the box” changes would be difficult.

The industry insider said perhaps instead of being so ambitious Tower Holdings may seek to scale back development plans to make it palatable for a new owner.

Sydney-based entrepreneur Glenn Piper plans be a guide having recently spent a rumoured $10m plus to purchase the leasehold of Hook Island Lodge near Hayman Island.

He has plans for a “barefoot luxury resort” which includes a $20m world-class eco-lodge, with food and beverage at the heart of the experience.

That development is light years away from Sydney-based developer Terry Agnew’s Tower Holdings ambitions when he bought the leasehold for Great Keppel Island Resort for $16.5m in 2006 and since 2008 has been closed after being smashed cyclones and the impact of the global financial crisis.

Over the years there have been various ambitious plans floated for the island resort including building a casino. In 2014 Mr Agnew appointed golfer Greg Norman to help revitalise the resort with a planned $600m integrated villa, resort and golf development.

Those plans never materialised and Mr Agnew put the leasehold on the island resort once again on the market in early 2018 and the campaign drew interest from around the world including America, China, Singapore, Australia, the United Arab Emirates and Europe.

There have been a number of would be buyers come and go over the years with the latest being Taiwanese richlisters Wan Long Wei and Pauline Wei who exchanged contracts in 2018.

A year later Sunshine Coast-based developers Altum Property Group also signed a contract to take over the leasehold but the State Government rejected the purchase based on the findings of an independent financial and managerial capability assessment.

And Ms Rinehart is the last of a long list of would be buyers.

It has been reported that Tower Holdings has started discussions with other prospective partners in the hope to deliver the revitalisation of the Great Keppel Island Resort.

However, it seems ironic that the place made famous by a successful 1980s tourism advertising campaign: “Great Keppel Island: It’s a great place to get wrecked”, is a place where many an ambitious plan has indeed been wrecked.

Additional reporting by Pam McKay

This article was original published on www.theaustralian.com.au.