The Rydges Sydney Airport Hotel has been listed for sale in what is expected to be one of the year’s largest single-asset transactions with prices expectations of up to $270 million.
It is the first time the 318-room property, 100m from the international terminal, has been on the market since it was developed by Sydney businessmen Phillip Wolanski, David Baffsky and John Landerer in 2013.
As well as its guest rooms, the hotel features three food and beverage venues, including a top-floor bar; 11 conference facilities, and a business and fitness centre.
It is being sold as a vacant possession by CBRE Hotels’ Wayne Bunz and JLL’s Mark Durran.
“While the hotel has been very well managed by Event Hospitality under their Rydges brand, vacant possession can be obtained, providing owner-operators and alternate management companies with substantial brand exposure,” Durran said.
“Prime investment-grade hotel assets in strategic locations such as the Sydney Airport precinct, particularly those offering vacant possession, are highly sought after and prices remain solid.”
The global roll out of Covid-19 vaccines and consequent indications that international travel will be recommencing this year had prompted the hotel’s owners to launch the campaign after several unsolicited approaches.
Bunz said the campaign had been timed to capitalise on the new trans-Tasman travel bubble, which started with New Zealand this week.
Prior to the pandemic, the hotel had one of the city's highest occupancy rates. It was built as part of the extensive expansion of the international airport’s commercial precinct, which included additional office space.
Heading into the pandemic, occupancy rates sat at 97 per cent and an average daily room rate of $243, which has since dropped to 36 per cent so far this year, while average revenue per available room is just above $46.
The listing comes after the sale of the five-star Primus Hotel in central Sydney for $130 million, equating to $767,000 per room, reflecting a historically low investment yield.
Across Sydney, a number of new hotels are currently under construction, comprising upwards of 2400 rooms, with 500 rooms in key fringe markets adding to a potential oversupply issue.
New hotels under way include James Packer’s Crown Hotel Resort, One Circular Quay, Pontiac Land Group’s 5-star Capella Sydney and Doma Group’s 230-room Little National.
Other hotels waiting in the wings include the BVN-designed Voco Central and 55-storey, $700-million Andaz Hotel.
Meanwhile, The Star is pressing ahead with a $1-billion project at its waterfront site in the Sydney's Pyrmont, with revised plans before council for a two-tower, 6-star hotel.