Office-to-Hotel Conversion Floated for Sydney’s Clarence Street

Plans to convert a Sydney CBD office tower into an eight-storey, 69-key hotel have gone on exhibition. Proposed for a 413sq m site at 235-239 Clarence Street, the project would repurpose a seven-storey commercial block at a cost of $16.6 million. An application to terminate the strata arrangement was approved in May 2026, with the entirety of the building held by Weng Cheong Wong. A document associated with that application said that an intention of “leasing the building on a whole of floor basis (or larger consolidated areas) to a single tenant rather than leasing former strata lots”. A number of suites and floors are currently available for lease. The Stack Studio-designed scheme now on show would yield 2321sq m of gross floor area, at a floor space ratio of 5.6:1. Internal demolition works would retain the lift core and structural elements, while the basement would be reconfigured to hold services and plant. Car parking would be reduced from eight to three spaces. ▲ The facade would be revamped under the plans now on exhibition. The ground floor, which currently holds retail spaces, would be altered to hold a hotel lobby and service area, back-of-house facilities, and a new 78sq m retail tenancy. Levels 1 through 6 would hold 10 hotel rooms each, while the terrace on level 7 would be altered to hold nine rooms. A new level 8 would hold further plant. Difficult conversion years in the making A flurry of transactions in 2022 lead to several strata of the building being packaged and then sold by lawyer Joseph Antoun. In collaboration with other owners in the building, Colliers then ran a campaign for 90 per cent of strata entitlements. Antoun told The Urban Developer that “we first bought in 2000 and then kept expanding” as his legal practice, then operating in the building, grew. ▲ The proposed hotel layout would have bedroom windows facing either Clarence Street or an interior lightwell. “We bought five-and-a-half floors and the carpark,” Antoun said. A feasibility study conducted by Antoun and his business partner in 2019 explored the potential for a 15-storey hotel, and aggregating with adjacent buildings including the heritage-listed Archway Terrace to the south, among other uses. Under the controls and building code then applicable, that feasibility study found that “the proposed building floorplate [without acquiring other buildings] would likely to require more amenity and services within the same building footprint”. “As such, while gaining additional floors, the typical floorplate efficiency may be likely to be lower than the existing,” the study said. Separately, a source familiar with the building told The Urban Developer that they “think the building has a lot of potential”, but that the choice of a hotel conversion would be difficult. ▲ The current commercial interior would be demolished, retaining lift cores and structural elements. “I know this building inside and out. I don’t think there’s enough natural light. I don’t see how they would do it,” the source said. “There’s plenty of hotels nearby that are only operating at 60-70 per cent [occupancy].” Hotel sector in flux The proposal comes amid a NSW push to develop an additional 40,000 hotel rooms by 2035 . Deicorp is leading with a pivot from office space to hotels in under-development projects , while Bronxx is re-positioning with a hotel operator play at 311-317 Sussex Street . However, Revelop has dumped an approved hotel on the site of the Genesian Theatre at 420 Kent Street, 422-424 Kent Street and 275-277 Clarence Street, opting instead for residential, retail and recreation. The historic Genesian will be retained, although a community campaign against the Divine Playhouse—a LGBT nightclub temporary activation—led to that tenancy ending after just three days in July. ▲ Revelop has moved away from a hotel use for its Genesian Theatre site project. Down the road at 499 Kent, Sam McVay of McVay Real Estate is marketing the under-construction 228-key Hotel Florin, an adaptive re-use of the former Universal Pictures headquarters . The Urban Developer understands a price in the range of $250 million to $300 million is expected. And in August, Metrics won a LEC case seeking to block its $183-million residential revamp of the Sir Stamford Hotel. Adaptive re-use of lower-grade office blocks , hit hard by Covid and the working-from-home trend, have been increasingly explored in recent years. Commercial floorplates and services are typically less appropriate for conventional apartments, but may be suitable for other living uses. The Dexus and Frasers project at Henry Deane Plaza, once touted as the centrepiece of Sydney’s Tech Central alongside the Atlassian Tower , will now convert two existing office blocks to 694 student beds instead of demolishing them for a $3-billion dual-tower scheme . And in the Parramatta CBD, Holdmark is expected to break ground in September on a $100-million office-to-PBSA conversion at 10 Valentine Avenue .

Hotels
Patrick Lau
Thu 27 Aug 26

Office-to-Hotel Conversion Floated for Sydney’s Clarence Street

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