Boutique hotel proposed for Federation warehouse in Sydney CBD laneway
Sydney hotel developer Johnson Yeh is planning to convert a Federation warehouse into a boutique seven-storey hotel that many may consider an unlikely location: a narrow lane connecting George and Pitt streets that has long been used as a loading bay.
His company Yeh’s Hospitality Group has proposed the $5.5 million project that would add two storeys with private balconies above the century-old building, which occupies a 237-square-metre site at 7-9 Wilmot Street.
All up, it will have 58 hotel rooms across 1081 square metres and an 87-square-metre retail space on the ground floor.
Mr Yeh has high ambitions to bring Melbourne’s laneway culture to the underused back streets of Sydney’s CBD.
The building will be refurbished with two levels added on the top. Image: SWA Group
The City of Sydney had upgraded Wilmot Street to encourage more activity as part of the council’s laneway revitalisation program. Despite this, there are still only two eateries and a backpackers’ accommodation in the laneway – and two of these are located in the building proposed for development.
But the hotel developer and operator is confident his project could change that.
“We were looking at various sites at the time, but this site actually caught our eye because it’s quite centrally located but in a quiet alley, that was one of the main aspects,” Mr Yeh told Commercial Real Estate.
“The whole idea behind it is we are planning to make it more of a boutique hotel, so it gives you the feeling of home away from home, rather than the central business district-type of vibe.”
Wilmot Street is still a quiet alleyway, despite the council’s investment. Photo: Google Maps
The Federation building as it is now. Photo: SWA Group
The ground-floor tenancy, most likely a food-and-beverage retailer, will be a key decision.
“We do have plans revolving around that and once we set it into motion we’d be quite selective who we’d bring into the retail space.”
Originally, Mr Yeh had looked at knocking down and rebuilding 10 storeys on the site, which isn’t heritage listed. But after consulting with council heritage specialists and their architects, he opted for an adaptive reuse of the building.
“The external character of the industrial warehouse will be a drawcard for customers of the hotel to illustrate the historical fabric of central Sydney,” planning documents wrote.
The Wilmot Street property was bought for $11 million in September 2017, Domain Group records show.
Mr Yeh is considering selling Kent House (left) for up to $80 million. Photo: Supplied
Mr Yeh’s group will manage the hotel once completed.
It has also been operating another hotel in the former Spanish Club at 88 Liverpool Street since 2015, and is open to purchase offers between $75 million and $80 million for that building – a strong gain from the $9 million they paid in 2011.
“It is one of our main hotels at the moment, there’s no real need to sell it, and we don’t really have the intention, (but) we are open to options of course, but it’s not something that we’re actually looking at at the moment.”
The developer has been stepping up activity recently, with its 87-room hotel at the QVB Chambers at 143-145 York Street, expected to open at the end of the year. Two more – one near Hyde Park and another near Barangaroo – are in the pipeline, and with the Wilmont Street hotel, all four hotels are set to open in the next five years.
Mr Yeh said his development strategy was to target the mid-range of the hotel market.
“If you actually look at the hotel market as a whole, high-end hotels and the lower-end budget hotels are quite popular, but the middle niche market is still quite free for the taking,” he said.
“There’s not enough three to four-star (hotels) in the city at the moment and there’s a lot of room to grow.”
