Singaporean serviced apartment giant The Ascott Limited has struck a $202 million deal to buy a 252-room hotel in what will be North Sydney's tallest tower.
The Ascott Serviced Residence Global Fund, backed by Middle East sovereign wealth fund, the Qatar Investment Authority, will purchase the hotel component of Billbergia's 48-storey mixed-use tower under construction at 86-88 Walker Street.
The JV private equity fund, which holds a portfolio of assets worth $900 million, includes the $71 million Quest apartment hotel recently completed at Melbourne's Docklands.
The Citadines Walker North Sydney, as it will be known, will sit below 13,000sq m of office space across 21 levels and will include a restaurant, rooftop bar, meeting rooms, business centre, executive lounge and a fitness centre and end-of-trip amenities.
The 10,000sq m hotel will incorporate 252 hotel suites, starting from 18sq m a room, across 16 levels.
The project is centrally located to key public transportation including a train station and ferry wharf, as well as the new Victoria Cross metro station which is expected to open by 2024.
Development heavyweight Billbergia, who built Brisbane’s tallest residential tower, the 270 metre “Brisbane Skytower”, paid $32.25 million to buy the 1895-built Firehouse hotel at 86 Walker Street in July 2018 from fund manager Marprop Real Estate Partners.
It also paid an undisclosed sum to buy the air rights above theFirehouse Hotel, before obtaining development approval in February for the $153 million project.
Ascott chief executive Kevin Goh noted its North Sydney acquisition was part of its strategy to grow its fund management portfolio through private equity funds, joint ventures and listed hospitality trusts.
“This latest acquisition in Australia is in line with our strategy of growing our fund management portfolio through private equity funds, joint ventures and listed hospitality trusts – all of which provide a core asset base for our asset management business.”
The Ascott also announced the signing of 13 other properties under franchise and management contracts across China, France, Indonesia, Kenya and Vietnam, bringing its asset value to S$10 billion.
The Ascott Limited, a subsidiary of listed real estate powerhouse CapitaLand, currently has more than 66,000 operating units and close to 46,000 units under development, making a total of more than 112,000 units in over 700 properties.
The REIT has secured a total of 10,600 units this year — double the number of units signed for the same period last year.
Earlier this year, Ascott REIT lifted its Australian hotel portfolio to over 900 rooms after buying the 150-room Felix Hotel at Sydney Airport for $60.6 million.
“Ascott will continue to ride on this growth momentum to achieve scale with our international network of well-known hospitality brands,” Goh said.
“We will continue to boost our fee income through growing our assets under management and lodging management business.”