Asian buyers vying for Sydney Sofitel and Channel 9 HQ
Asian investors and developers coupled with cashed-up locals are vying to buy the two biggest commercial real estate projects in Sydney — the $200 million Nine Network head office site and one of the last dowager hotels in the city, the $400 million Sofitel Sydney Wentworth Hotel.
Singapore’s Frasers group, local billionaire developer Harry Triguboff’s Meriton and the listed Mirvac are said to be in the running to buy the Nine Network site on Sydney’s lower north shore from its Asian joint venture owners, who are asking about $200m.
The vendors, Michael Jiang’s Lotus Capital and Hong Kong-based Euro Properties, paid $147m for the residential site in 2015.
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Nine remains the tenant at the 2.9ha Willoughby site, which has an approved masterplan allowing for the development of 460 residential apartments across 10 towers ranging from four to nine storeys until late 2020.
The NSW government received thousands of submissions against the Willoughby project mostly relating to traffic generation and parking issues, followed by insufficient infrastructure and excessive height. But the state government does not believe the project would result in unacceptable traffic generation.
Despite that, the site’s selling agents, Colliers International, say there has been strong interest driven by the low value of the Australian dollar and the possibility of further interest rate cuts, as well as an “early sign of the market turning”. As a sweetener, the site remains cash-flow positive until 2020.
Guillaume Volz, Colliers International’s national director for development sites and residential, says he has been surprised by some of the unusual combinations of foreign equity and boutique local developers showing interest. “We see this as a positive for Sydney’s future residential market,” Volz says.
He says foreign capital, largely Asian, is looking for a safe haven in quality trophy projects.
Expressions of interest in the Nine Network site close on May 30.
Closer to the CBD, Michael Gu’s investment firm iProsperity is leading the pack to buy the Sofitel Sydney Wentworth in Phillip Street that hit the market earlier this year.
There are apparently four strong parties looking at the hotel, but Mr Gu has shown the strongest interest. The 436-room hotel is being marketed by JLL Hotels’ Craig Collins. He could not be reached for comment yesterday, and iProsperity declined to comment.
Expressions of interest in the Sofitel Sydney Wentworth, which is in need of a major renovation, closed on March 14. The vendor is Singapore’s Frasers Hospitality Trust.
This article originally appeared on www.theaustralian.com.au/property.
