Shanghai giant swoops on iconic Kings Cross hotel
China’s largest developer Greenland Group has swooped on the old Crest Hotel in Sydney’s inner-city Potts Point as well as a pub in west suburban Parramatta in a deal believed to be worth about $170 million.
The Shanghai-based giant has made its first local purchase this year after an acquisitive 2014, buying the two properties with development potential from Sam Arnaout’s hospitality and development group Iris Capital.
Colliers International handled the off-market transaction, with an announcement expected early next week.
The state-owned Greenland — which is bidding with James Packer’s Crown Resorts for the rights to develop a multibillion-dollar integrated casino project in Brisbane — is upping its development pipeline as it prepares to float its entire operation on the Shanghai Stock Exchange.
In Potts Point, the old Crest Hotel, run most recently as a Mercure Hotel, has development approval for 139 apartments with Sydney Harbour views.
Greenland’s purchase marks the entry of major Chinese developers into the famed strip.
The property is near the Coca-Cola sign in the Kings Cross precinct, with agents expecting the area to yield to more apartment development because of strict lockout laws introduced by the NSW government last year. Iris earlier this year unveiled plans to develop the 19-storey tower with an hourglass design by architects Durbach Block Jager, although it is not yet known whether this design will remain with Greenland as the owner.
The Victoria Road project was to have an end value of about $300m, with apartments starting from about $800,000.
Iris Capital bought the site off Australand in 2012 for $65m, and submitted its plans to the City of Sydney council earlier this year.
In Parramatta, Greenland is buying the Crown Hotel, which has the potential to be developed into apartments.
It will be the first project Greenland will undertake in the affordable, albeit booming suburb, after previously buying in inner-city and CBD areas.
Iris has made a name for adding units and accommodation across its Sydney pub holdings and for onselling some properties after winning approvals.
The group developed the Hunters Hill Hotel, while also planning projects on its other pubs.
Mr Arnaout has flagged that the company is considering an initial public offering on the Australian Securities Exchange.
He declined to comment on the deal yesterday, while Greenland and Colliers International could not be reached.
Before its latest purchase, Greenland had bought four local sites with an end value of $1.6 billion since entering the market in 2013 with a high-profile site purchase in the Sydney CBD.
The group has been focused on bidding for the Queens Wharf in Brisbane, where the group and Crown Resorts are up against an Echo Entertainment-led consortium for the rights to develop the landmark project.
Source: The Australian - 6th June 2015
