.gif)
Lend Lease, Schwartz hotel Sydney’s ‘missing piece’
Property heavyweight Lend Lease and Australia’s largest private hotel investor, Jerry Schwartz, have committed to addressing Sydney’s luxury hotel shortage by building the city’s first five-star hotel in almost 15 years.
Workers yesterday poured the first concrete for a new 600-room Sofitel hotel at Darling Harbour that will adjoin the International Convention Centre, with politicians and executives describing the property as the “missing piece” to put the new precinct on the world stage.
“A world-class hotel was an essential component of the government’s vision for a convention, exhibition and events destination that would reinforce Sydney’s appeal as one of the world’s best places for business events,” NSW Tourism Minister Stuart Ayres said. “Sydney is getting the infrastructure it needs to secure its long-term place on the world stage.”
The 35-storey hotel, costing more than $350 million, will bookend a waterfront precinct where Lend Lease projects have a substantial presence, including the Barangaroo South development and Darling Square.
“Sydney has underinvested in new accommodation over all in the city, certainly since the boom since the Olympics, but now there is a wave of investment in the sector,” Lend Lease urban regeneration director Jonathan Emery said. Lend Lease is developing the hotel, with Mr Schwartz to take ownership on completion. The deal, brokered by Savills and revaled by The Australian in April last year, has changed the complexion of his hotel empire.
“I usually buy older assets and do them up, but I realised the value in this hotel would only appreciate,” he said.
“When I purchased the hotel I thought it was for a reasonably high price, but as we’ve seen, five-star hotel rooms have appreciated so much in the past 12 months ... its been a fortunate time.”
Sales of Australian hotels are their strongest in a decade, according to real estate agency JLL.
Major Australian hotel markets have posted RevPAR growth, a measure of hotel profitability, over the year to date, with five-star hotels in Sydney and Melbourne standing out as the star performers. Sydney’s five-star hotel rooms have posted RevPAR growth of 5.6 per cent to hit $250 and Melbourne rooms are up 5.8 per cent to $245.
“The accommodation sector is forecast to continue to benefit from growth in both international and domestic visitor room night demand due to a lower Australian dollar, tourism initiatives and significant hotel development pipeline,” CBRE Hotels director Ken Smith said.
Source: The Australian Business Review, Samantha Hutchinson, July 31st 2015
Originally published as: Lend Lease, Schwartz hotel Sydney’s ‘missing piece’
