A hotel in the Sydney suburb of Mascot could be transformed into student accommodation or sold down as residential units after a group of strata owners banded together to take it to market.
The Airport Suites, currently operating as a hotel, is being brought to market in one line for the first time since it was built in 2003.
The property at 1285 Botany Road contains 35 fully furnished self-contained apartments, including three two-bedroom, 24 one-bedroom apartments and eight studio apartments, along with 26 car parking spaces. There is existing approval in place to convert the top floor apartments to residential use.
Listing agent Andrew Langsford of JLL’s Hotel and Hospitality Group said the 1063-square-metre site would appeal to investors looking to cover all of their options in the face of an uncertain economic outlook.
“I suppose some of the benefits of this asset is that it does suit a number of uses so it certainly gives the incoming owner a lot of flexibility in terms of how they position the asset and a lot of exit opportunities when they choose to sell – whether that’s a residential strata selldown or a student accommodation business in place or as an ongoing hospitality building,” he said.
JLL’s Dylan McEvoy, who has the listing with Mr Langsford, said there had been a growing trend of alternative accommodation uses in Sydney’s inner suburbs.
“Sydney’s real-estate market has also seen a growing trend of ‘alternative accommodation’ operators and investors greatly expand their footprint in Sydney’s market – this includes offshore and domestic co-living groups, and new entrant student accommodation groups,” Mr McEvoy said.
The owners had decided to bring the property to market following the completion of work on the Botany Road underpass in February.
Currently operated by AEA Hotels as serviced apartments, the property is being offered with vacant possession, or with the option of ongoing management.
“”There are a number of opportunities for an incoming owner [if they choose to keep it as a hotel], such as installing advertising boards above the building, renting out the car park, conversion of the manager’s unit into the letting pool as well as an ongoing marketing program,” he said.
While he did not disclose a price guide, Mr Langsford said recent strata apartment block sales could provide an indication of prices strata assets can fetch.
Recent strata sales include an amalgamated apartment site in the Sydney suburb of Cronulla, listed by Mr McEvoy, which sold for $38.2 million after 30 individual owners joined forces.
Asked whether the threat of the coronavirus would have an effect on the future direction of the property, Mr Langsford said it paid to look at how the hospitality sector had responded to past pandemics.
“Obviously there will be an impact on the hospitality sector with limitations on travel,” Mr Langsford said.
“[But] looking at SARS and the like, hospitality businesses do bounce back well and strongly owing to the deferred demand for business and hospitality,” he added.
In addition, the property’s position close to the Port of Botany meant it could rely on ongoing patronage from port workers.
“This particular business, the majority of the business is more port-dependent than airport-dependent. We are seeing strong demand for self-contained accommodation where they can offer a kitchen and cooking facilities, so the property is still maintaining full occupancy through the year at this stage.”
Expressions of interest for Sydney Airport Suites close Thursday, April 16.
Keep up with Commercial Real Estate news.