D-Day Looms for InterContinental Double Bay $215m Asset Flip

The InterContinental Sydney Double Bay is in the final stages of settlement of a $215-million asset-flipping deal. Investor Mervyn Basserabie and property developers Allen Linz of Rebel Property and Eduard Litver of Capit.el Group have picked up the hotel in one of Sydney’s most exclusive suburbs. The 140-key, 5-star hotel was refurbished in 2014, however perhaps even more enticing is its 3674sq m freehold footprint at 33 Cross Street, 4km east of the Sydney CBD, making it ripe for mixed-use development. The trio hope to pick up where joint-venture owners Fridcorp and Piety Group left off. They decided instead to offload their stakes in the landmark hotel “to pursue separate projects”. Melbourne developer Paul Fridman and Piety Group’s Bilal El-Cheikh paid $178m for the property in 2021 from Shanghai United, who had acquired the building four years earlier. ▲ Built in 1991 and originally launched as The Ritz-Carlton, the 140-key property has been managed by IHG Hotels &amp; Resorts for the past eight years. The hotel was once popular with the rich and famous—Princess Diana and David Bowie were guests and, tragically, INXS lead singer Michael Hutchence was found dead in one its suites in 1997. And in January of this year test cricketer David Warner’s baggy greens went missing, prompting a plea for their return not only from the player but also Prime Minister Anthony Albanese. They were found at the hotel, with the team’s luggage days later. Basserabie, Litver and Linz now want to wipe the slate clean with a shoptop residential development that has a gross end value of up to $700 million, according to Capit.el Group. Deals nearby point to the value of the blue-ribbon suburb. Next door, a 219sq m penthouse in Top Spring Australia’s Ode residential development sold for $21.5 million and a 311sq m penthouse for nearly $25 million off-the-plan. Those sales broke the suburb’s previous record of $16.09 million. In the past 12 months the average price of apartments in the suburb rose 16.6 per cent, according to REA Group data. The InterContinental Double Bay was put on the market in January via an expressions of interest campaign conducted by CBRE and Colliers. ▲ The hotel is a short walk from Sydney harbour in one of the Emerald City’s most exclusive enclaves. CBRE hotels senior director Tom Gibson says it sold unconditionally, that contracts had been exchanged and that it is pending settlement. “It had an extended settlement with the residential player as they were trying to push through a development application, so it took a little longer than your standard transaction,” Gibson tells The Urban Developer . “We had a residential team working on this with us, but given there weren’t any DAs in at the time of the sale process—we were selling it as a hotel with a repositioning strategy. “We got a scheme trialed and tested with the council before going to market. “We tweaked the design so it was borderline receptive and almost on a ready-to-submit basis and that’s when we started the campaign. “It’s a beautiful spot and these guys will do an excellent job with a residential redevelopment. They got the scheme and I believe materially changed it (but) we haven’t been privy to that.” ▲ Recent upgrades included a transformation of the bar and restaurant by the restaurateur Maurice Terzini of Bondi’s Icebergs Dining Room and Bar fame. Colliers head of hotels Karen Wales says it is good timing as hotel volumes have softened in the three record years since Covid. “Volumes are more subdued because interest rates have increased and both buyers and sellers are looking to get a better line of sight on how it will play out,” Wales says. “Trading performance still remains very strong. There’s a lot of confidence in the market.” Capit.el Group is testing this confidence elsewhere, putting the Ibis Budget Melbourne CBD on the block at 97-103 Elizabeth Street this week. The hotel is listed with Cushman &amp; Wakefield and CBRE. It has 146 rooms on a 702sq m site between Collins and Bourke streets. ▲ Capit.el Group is offloading Ibis Budget Melbourne CBD with price expectations north of $35 million. Wales says Rebel and Capitel are moving their plans, which will fit in with other high-end residential projects at Double Bay, forward, “A lot of those projects were in progress when we took that asset to the market—the renaissance of Double Bay continues with the opening of Neil Perry’s new restaurant Song Bird and his bar Bobbies, and the Matteo guys opening the new Japanese restaurant Tanuki,” Wales says. That term, renaissance, is being thrown around by property players, the InterContinental trio themselves and, it seems, everyone with a slice of Double Bay pie. ▲ Capit.el Group shared news of the InterContinental Sydney Double Bay deal which was months in the making, confirming its plans to develop. That includes that next-door neighbour at the Double Bay Plaza, Top Spring who bought the1334sq m plaza site for $94 million in 2021. Construction has begun on that project. Nearby, there is a shoptop development by Primo Development Double Bay and Sayed Holdings in the works while the Tripodina family is planning a high-end cosmetic centre to service the region and Fortis won approval for a premium office to be called Ruby House, also in the suburb. You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. Click here to learn more.

D-Day Looms for InterContinental Double Bay $215m Asset Flip

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