In a welcome sign of confidence in the hotel sector, private developer Built has announced it has taken on a joint venture partner, ASX-listed Irongate Group, to develop a 5- or 6-star hotel on Phillip Street.
Built is currently planning to amalgamate and develop two buildings, the NSW-government-owned 50 Phillip Street and the neighbouring 14-storey Kusu House at 52 Phillip Street it owns.
The company purchased 52 Phillip Street in 2017 and repositioned it as a commercial investment, refurbishing and re-leasing a number of vacant floors.
It now plans to remix the existing buildings at both addresses, combining them to form a 1681sq m development site in order to deliver a 240-room hotel.
Under the Built-Irongate proposal, 50 Phillip Street would become the hotel’s main entrance and lobby, and house conference rooms and back-of-house, and host rooms.
The project has been submitted through the state government’s contentious unsolicited proposal assessment process.
Built began the process of acquiring the 99-year leasehold purchase of 50 Phillip Street in 2017.
The proposal reached the second stage of development assessment in October 2019.
The concept envisages a new slender tower that will taper away from the street while maintaining the original streetscape.
The final design will be decided by a design competition, as required under state government rules.
Irongate chief executive Graeme Katz said the company, formerly the Investec Australia Property Fund, was proud to be partnering with Built on a landmark development opportunity in the heart of the CBD.
“The development is one of the seed assets of our recently launched Templewater Australia Property Fund,” Katz said.
“The fund forms part of Irongate’s wholesale funds management platform and shows the breadth and depth of our property investment capabilities in Australia.”
Built managing director Brett Mason said the inclusion of high-end apartments in the development stemmed from a growing demand for high-quality property in Sydney, which has experienced a rapid resurgence in recent months.
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Built will restore the original character of the building at 52 Phillip Street—until recently a home for the state’s department of planning, industry and the environment—and replace its original heritage joinery.
Built has partnered with heritage specialist Graham Brooks, who has previously been commissioned by NSW government, to develop the conservation management plan for the property.
Late last year, Built topped out its refurbishment of two historic Sydney buildings at its Sub Station No.164 at 185 Clarence Street development, delivering an A-grade office tower with a seven-level sculptural glass extension.
The proposed Phillip Street hotel is the latest landmark development to emerge from the government’s unsolicited proposal process.
A partnership between Dexus and Frasers Property Australia is pressing ahead with plans for a $2.5-billion twin tower development in the heart of the government-backed technology precinct next to Central Station.
Further into the CBD, Macquarie won over the state government with its unsolicited proposal in 2017 to develop both a new metro station at Martin Place and the commercial property above.
The development has since been picked up by Investa alongside partner by Canadian financial services group Manulife for $800 million.