Sand-filled winds of change are sweeping across one of Australia's most famous beachside suburbs with a freshly-inked circa $70-million deal adding momentum to a rising new wave of development.
Noah’s Backpackers, on a prized site just across the road from Sydney's Bondi Beach, has changed hands and is ripe for redevelopment.
It has been acquired by former investment banker-turned-pub baron John Adgemis with a view to creating a flagship hotel and hospitality asset.
The beachside hospitality play will add to the expanding $400-million hotel empire of his ambitious Public Hospitality Group. It currently controls 17 pubs and hospitality venues.
The Bondi acquisition is a coup for the group, which fended off strong offers for the landmark backpackers’ hostel at 2-12 Campbell Parade.
Local and interstate groups made up most of the buyer pool but two interested parties also jetted in from the UK and New Zealand to inspect the property.
Public Hospitality's executive director Peter Crinis told The Urban Developer the large site, its view corridors to the beach and the iconic nature of Bondi made the perfect mix for a marquee asset.
“We’ve got a long journey to go on, there’s a lot of work to do—we’ve only just purchased the asset,” Crinis said.
“But we’re in a very unique position now. It’s right where we want to be and we think, with a lot of consultation, we can create a fantastic lifestyle hotel.
“We have a heavy focus on accommodation. All of the pubs that we’re renovating and bringing back to life, we’re re-doing the hospitality but importantly we’re also re-doing all the rooms on the second and third floors that people had stopped using.
“That’s our model, creating a strong accommodation offer and surrounding it with interesting hospitality assets … and the combination of Bondi and that site lends itself to a bigger, better version of what we’re already doing.”
The 1100sq m corner site, next to Hunters Park, fronting the southern end of the beach, comprises a 260-bed hostel, along with a ground-floor shop and an adjoining apartment block.
Crinis said the group's plan was to keep the hostel going “in a version of its current self" until it came up with "the right sort of scheme we’d like” for the redevelopment of the site.
The site’s mixed-use, medium-density zoning leaves open the opportunity for a major facelift of the blue-chip beachfront property and was a major drawcard for potential buyers.
The asset was taken to market via an expressions of interest campaign by Miron Solomons, Matt Pontey and Henry Burke of Colliers, in conjunction with Oxford Agency’s Daniel Marano and Ralph Garofano.
It was touted at the time as the largest development opportunity to be listed in Sydney’s eastern suburbs in the past decade.
With a number of other high-profile sites on the market, the industry view is Bondi is feeling the forces of change and on the cusp of a new wave of development.
Already the heritage-listed Bondi Surf Bathers and Life Saving Club built in 1934 has been greenlit by the Waverley Council for a major upgrade, including the addition of a public courtyard.
Together with an approved $25-million project to restore and overhaul the neighbouring Bondi Pavilion, it will revitalise the foreshore.
“Bondi is an incredibly dynamic property space,” Crinis said. “It’s really attractive. The value of the real estate there is so strong because of where it is and what it is.
“And where appropriate development can be made, there’s potential for great returns … and that will mean people will be highly active in that part of the market.”
Other assets in Public Hospitality Group’s portfolio include The Strand Hotel, Balmain’s Exchange Hotel, Erskineville’s Kurrajong Hotel, The Empire Hotel in Annandale and Redfern’s Norfolk Hotel. It also owns two Melbourne pubs, the Vine Hotel in Collingwood and the Saint Hotel in Fitzroy.
