A 100-key Radisson Hotel in Darling Harbour has hit the market, with price expectations north of $40 million.
Developed and operated by Shokai Ausbao, with a franchise agreement in place with the Radisson Hotel Group, the hotel comprises 76 strata freehold serviced apartments and leasehold interests in 24 serviced apartments.
Shokai developed the 1,350sq m mixed-use asset at 72 Liverpool Street, which includes a freehold interest in the lobby, conference space, retail and eight car parking spaces. Radisson has operated the hotel under franchise agreement since its 1998 opening.
Colliers head of hotels Gus Moor said early termination with the hotel operator would allow an incoming buyer to acquire the asset with freehold vacant possession.
“[This] permits an incoming purchaser to buy with the franchise agreement or introduce their own preferred operating structure—a very rare offering in Sydney’s tightly-held hotel investment market,” Moor said.
The impact of Covid-19 travel restrictions and domestic lockdowns has been acutely felt in the hotel sector, with more than 40 hotels closing in Sydney over the past month. A recent Savills’ hotel market update reported an 84 per cent fall in hotel transaction activity globally.
Despite pre-coronavirus occupancy levels still up 40 per cent on Melbourne’s CBD, Sydney’s hotel market experienced some softening in 2019 as the market corrected, according to Colliers.
The $40 million-tag prices each freehold apartment around the $530,000 mark—less than $730,000 a key for the recently-transacted Vibe in Sussex Street or the $680,000 a key for the Seasons at 252 Sussex.
The Vibe and the Seasons hotels were the only two CBD hotels to transact in 2019. The Seasons Sussex Street asset sold in August after changes to NSW strata legislation paved the way for a collective strata sale.
Shokai Ausbao is the Australian arm of the Beijing-based Shokai Group—the group also developed the Crowne Plaza at 60 Bathurst Street and is soon-to-complete the 680-apartment Granville Place.
The 72 Liverpool Street asset is being offered for sale by expression of interest closing Monday 18 May.