Sydney CBD in hotel investors’ crosshairs
Investors continue to flock to Sydney’s hotel market. More than $1 billion worth of new hotels are planned in the CBD as international and domestic tourism arrivals continue to rise, despite the recent opening of the 590-room Sofitel at Darling Harbour.
And despite objections from neighbouring parties, Dexus Property Group has won approval for an opulent $426 million hotel at 201-217 Elizabeth St, near the Sheraton on the Park hotel, which was snapped up by a Chinese insurer several years ago for the then record of $463 million.
It has taken Dexus Property Group about a year to gain approval for its 361-room, 50-level hotel on the corner of Elizabeth, Park and Castlereagh streets, at the main entrance to the CBD from the city’s eastern suburbs.
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A hotel operator is yet to be signed for the project that will be spread through the lower 12 levels, with 262 residential units developed above. Dexus also proposes commercial space on the lower podium levels.
Dexus Property Group chief executive Darren Steinberg told The Australian clever use of site planning will achieve a 50% reduction of the shadow cast on Hyde Park compared to the existing building.
“Additionally, the size of the site has provided the opportunity to enhance the vibrancy of the precinct and renew the pedestrian access to Museum Station,” he claims.
Under the plan, Dexus, which manages a $26.5 billion property portfolio, will tear down the existing 38-storey office block it co-owns with billionaire Stan Perron, but the scheme has angered locals who claim they will lose access to light if the new building is constructed. Dexus failed to sell the existing building in 2014 but the value of the property has since jumped.
Meanwhile, Singapore’s SC Capital and Fortius propose a hotel for Bligh House, fronting 4-6 Bligh St. If approved, the existing 18-level commercial building, developed in 1964, would be replaced by a 55-level building comprising a 37-level hotel of 407 rooms.
Tourism Research Australia figures reveal that total visitor nights into NSW increased 4.8% in the past year to 198 million nights, with a 0.9% increase in domestic visitors and a 9 per cent increase in international nights.
– with Lisa Allen
This article originally appeared on www.theaustralian.com.au/property.
