Sydney's limited hotel stock is about to grow as a Melbourne developer, Ninety Four Feet is spending an estimated $50 million converting a 1909 heritage protected office building into a luxury hotel.
With Starwood in on the project, 302 Pitt Street will undergo significant works and be used as a 136-room hotel.
Residential group Ninety Four Feet said the development will be the first hotel rollout for the family run business, and is planning on developing at least three more hotels in Sydney and Melbourne on top of the more than 1000 apartments it already has under construction.
Speaking with The Australian, Managing Director of Ninety Four Feet Dean Rzechta said, "We had been looking in Sydney for a long time, but it's difficult to get set in this environment," Mr Rzechta said.
"(But) Greenland sparked interest in this location; they defined that corner. We have secured more hotel (sites) in the Melbourne and Sydney CBDs. We have three committed hotels already, but no brands and no planning approval as yet. We are hoping to roll out another Starwood asset within the next 6-12 months in Sydney and Melbourne."[urbanRelatedPost][/urbanRelatedPost]Ninety Four Feet acquired the 302 Pitt Street for about $10 million in late 2013 in an off-market deal.
"We don't see much value in commercial or retail anymore ... the hotel was an obvious no brainer," Mr Rzechta said.
"The hotel business is a very much cashflow-driven business and as a developer you part ways with a project when it's finished, but for us we were always looking for the creation of an ongoing income stream."