KSL Capital locks on to Sydney as city shows signs of life

New Hilton owner

Dr Jerry Schwartz, who paid $70m for Hilton Surfers Paradise . Picture: Jerad Williams

Sydney’s luxury hotel market is proving a surprising hub of activity for investors looking to position for a recovery in the wake of the coronavirus pandemic with KSL Capital inking a deal to buy the Four Points by Sheraton Sydney, Central Park, for about $150m.

The sale, flagged by The Australian, was the largest hotel purchase of the year and vendor Schwartz Family Company is also selling another CBD property, the $50m Ibis Sydney King Street as he reorganises his holdings.

Bidders have been narrowed down after a strong interest from local and international groups, and could see SFC owner Dr Jerry Schwartz reap a substantial gain on the $27m he paid for the property.

The KSL purchase was brokered by JLL Hotels & Hospitality Group managing director, Mark Durran, and comes hot on the heels of Chinese-backed Greenland’s sale of the Primus Hotel Sydney for $131.5m to Pro-Invest.

Primus will be relaunched in August as Australia’s first Kimpton Hotel, a luxury lifestyle hotel brand, opening to receive domestic travellers and then for the international market.

Sydney is setting the running and next major offering for the market is the Rydges Sydney Airport Hotel.

About $270m is expected for the 318-room hotel, which is being sold as a vacant possession by CBRE Hotels’ Wayne Bunz and JLL’s Mr Durran.

Eight years old and upgraded, the 318-room hotel is just 100m from the international terminal and is being offered by a syndicate that includes John Landerer.

Mr Durran said, “after a hiatus in major hotel transactional activity during 2020, the cycle has been reset this year and a new wave of global and local investors are entering the market and positioning themselves for the recovery”.

“We anticipate Sydney will be one of the most liquid hotel investment markets in Asia Pacific this year as cashed up investors seek to acquire quality portfolios and prime luxury and upscale hotel assets,” he said.

The Four Points by Sheraton Sydney, Central Park near-new hotel, having opening in late 2018, and it forms part of the massive Central Park mixed use development.

Dr Schwartz bough the under-development hotel in 2017 from the Liberman family-backed Impact Investment Group for $156m.

It ran at high occupancy rates of 85 per cent in 2019, in its first full year of operation reflecting strong underlying demand in the city location.

The Four Points is expected to be a major beneficiary of the emerging innovation and technology precinct being developed near Central Station, which will drive demand for hotels over the longer term in the southern end of the CBD.

The four-and-a-half star Four Points has 297 guest rooms, including 45 suites, a bar, restaurant, fitness centre, 50 dedicated car spaces and 551sq m of meeting space.

Development approvals are in place to add 11 extra guest rooms as well as roofing over and enclosing an outdoor terrace area to create year-round use. A further approval allows for a distillery.

Singaporean tycoon CK Ow is next week bringing six Stamford hotels around Australia to market with hopes of reaping about $1bn, the portfolio hitting the block as hotels swing into recovery.

The Singapore-listed Stamford Land Corporation has tapped JLL and CBRE to advise on the transaction, which could generate ­offers for the entire portfolio or see it carved up key assets properties, including the Sir Stamford on Sydney’s Circular Quay are primed for development.

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