Grocon sale to boost hotel market
by Leon Gettler
Grocon’s apparent selection of a powerful Chinese consortium to buy the $700 million hotel on the site of the IMAX theatre at Darling Harbour that it’s now developing has provided a massive boost for the hotel industry.
Selling The Ribbon would be largest ever sale of a single hotel property in Australia and there are expectations this would put a rocket under the value of hospitality properties across Australia.
Grocon has so far refused to comment on the speculation on the back of a surge in Chinese investment in Australian property. According to the Foreign Investment Review Board annual report, spending on Australian residential and commercial real estate doubled to $24.3 billion in the 12 months to June 2015 and the bulk of that was driven by Chinese investors.
Grocon chairman Daniel Grollo reportedly orchestrated the bid from China.
Grocon plans to redevelop the IMAX into a six-star W Hotel and luxury serviced apartments. It is also looking to revamp the theatre.
The plans have attracted a great deal of interest from offshore investors.
The Ribbon Hotel and Residences comprises a 402-room hotel and 159 one, two, three and four-bedroom apartments. It get its name from the elevated overpass which can look like a twisted ribbon.
Grocon’s planned redevelopment has been helped by the NSW government’s overhaul of the 20ha Darling Harbour entertainment precinct, taking in Grocon’s 23-level building which will also include retail and a cinema complex on the 31 Wheat Road site.
The speculation about the Grocon development is timely following the decision of Singapore’s Kum family to abandon the planned $1.5 billion sale of the bulk of its M&L Hospitality hotels portfolio. That portfolio includes Sydney’s largest hotels, the Four Points by Sheraton Sydney, which is being overhauled into a major hotel and office complex, the Travelodge Docklands in Melbourne, the Hilton Auckland, Christchurch’s Chateau on the Park, and Sydney’s Swissotel.
14th April 2016
