A high-end boutique hotel in the Sydney city fringe has sold for roughly $30 million to an on-shore hotelier.
The bespoke offering at 202-210 Elizabeth Street in Surry Hills comprises of 38 rooms across six levels, with two ground floor retail spaces, three outdoor terrace areas and a rooftop with views of the Sydney CBD.
The hotel was sold off-market by Colliers National Director Asia Markets Joseph Lin on behalf of Paul Fischmann’s 8Hotels and business partner, property investor and developer Jonathan Hasson.
“Given the post-pandemic recovery story, astute investors remain very interested in Sydney commercial properties in prime locations,” Mr Lin said. “It’s not difficult to understand the acquisition strategy of this newly completed hotel in the heart of the Tech Central precinct, the largest technology and innovation hub and urban revitalisation project in the foreseeable future.”
“With the phasing out of the strict lockdown measures in China, we anticipate seeing more Chinese tourists returning to Australia, giving a boost to the hotel room rate as well as the occupancy rate,” he added
”We are extremely proud of what we have built. We spent 3 years constructing the hotel and are very pleased with the sale price achieved, especially having just come out of COVID,” Mr Hasson said.
A first for a hotel in Sydney, it is constructed using highly sustainable Cross Laminated Timber, making for a much lighter environmental footprint than concrete or steel. It was constructed by Sydney-based Alessi Design and Build.
Colliers Head of Hotels Gus Moors said the sale was testament to the investor’s view of the strong long-term fundamentals of the Sydney hotel market.
“The recovery in trading gets better each month, with citywide occupancies now moving toward 70 per cent and average rates approaching nearly $280 across the CBD. To put that into context, the Sydney CBD had a rate of around $250 for the full calendar year of 2019,” Mr Moors said.
“Corporate travel is building well, business is bouncing back faster than anyone expected, and the domestic leisure sector continues to underpin the strong rate positions. If we layer in the re-emergence of international demand, and sectors like the cruise ship market re-commencing, the outlook is very positive for Sydney’s trading markets.”
“When you consider that hotels price their inventory on a daily (if not hourly) basis, it’s an asset class that can weather an inflationary environment well. Consequently, we are seeing the capital markets now keenly focused on the sector.”