A private Taiwanese family has snapped up a freestanding 60 room hotel in Pyrmont for $28.7 million from Malaysian corporation IGB.
They were the latest intergenerational investors to take a stake in the Australian hotel market which recorded about $2.1 billion in transactions according to a Savills report.
Despite poor forecasts for hotel bookings due to the bushfires and COVID-19 travel restrictions the hotel market remains strong.
The Darling Harbour hotel was a new development with nine levels on a freehold 280sq m site at 131-133 Murray Street.
IGB Corporation deputy Boon Lee Tan developed the hotel after previously building Tank Stream Hotel and restoring the Queen Victoria Building, Galleries Victoria and Strand Arcade.
The development application in Pyrmont was approved in early-2017 and opened in October the following year as Cititel X, joining a Malaysian network of boutique hotels, with private rooms and “co-living” cooking and living areas.
The new owners have flexibility over the eventual market position and management of the hotel which had a gross floor area of approximately 1,134sq m and mixed use zoning.
The hotel was sold by Jordan Lee, Andy Hu and Michael Simpson of Savills Australia.
“Sydney is one of the most sought after hotel investment destinations in Asia Pacific and is now considered comparable with other international gateway cities including New York, Paris, London and Hong Kong,” Hu said.
Simpson said there was a significant amount of pent-up capital seeking investment grade hotels in Sydney.
“The flexibility of being suitable for owner-operators, or being able to select your preferred operator also drove investor interest,” Simpson said.
“Despite having seen some very low transaction volumes in the Sydney hotel market for some time, quality offerings like this continue to attract interest from domestic and global capital which has been unsatisfied due to a shortage of available investment grade hotels for sale in Australia.”