Opening lines like this are always subject to interpretation. Their appropriateness, and how they might be taken, will depend on many factors, such as, is this a type of place that's consistent with this person's reputation? How well do you know this person? What's the history of your relationship? How long since you last saw this person? Are you a shy person who has difficulty in making small talk? Is the person likely to be embarrassed at being seen here by you? etc. etc.
Both your expressions are okay, and both have the potential for problems under certain circumstances.
If you're uncertain of the appropriateness, then best not to be a smart-ass. Express your pleasure and happiness at seeing this person, and wait for a reaction before possibly putting them on the spot. They may be equally surprised to see you, and may or may not share your happiness.
My point is, if you know the person well enough to make a personal remark which might embarrass them, then you would probably not be surprised to see them in that location.
If you know the person
really really well, then you'll know what to say. Otherwise, play it cool. Take an incremental approach.