Investment advisory firm iProsperity Group is offloading its Park Regis Hotel in Sydney’s CBD for an expected price within the mid-$50 million range.
The hotel stratum, which has 122 rooms, makes up 10 levels in the 45-storey mixed-use tower at 27 Park Street. It also comes with an outdoor rooftop swimming pool and 39 car spaces.
The group, which is ranked among the top 10 Australian hotel owners and targets high-net-worth Asian investors, announced last year its ambitions to ramp up the value of its commercial property and hotel portfolio to $10 billion.
iProsperity Group’s chief executive officer Michael Gu said Sydney’s hotel market is a stand-out performer in the Asia Pacific region.
“The Park Regis at Park Street attracted aggressive local and offshore capital interest when iPG purchased it back in 2016. It’s not surprising, given the immediate opportunity to capitalise on the strength of Sydney’s hotel market,” he said.
“The timing is right for iPG to look to sell this asset, under the strategic acquisition plan, as the business matures and we continue on our growth trajectory towards $10 billion (of) assets under management by 2020.”
Colliers International’s Gus Moors, who is selling the property with Karen Wales, said the hotel’s main attractions are its prime location at the corner of Park and Castlereagh Streets, a broad customer base, and robust growth and trading performance.
“Sydney is a very tightly held ownership market, with no CBD trading hotels transacting in 2017,” Mr Moors said.
“The opportunity to secure such well-located property is incredibly rare, with only six CBD hotel sales recorded over the past three years and only two of these have transacted for less than $100 million.”
Nationally, 26 hotels worth $1.38 billion exchanged last year, plummeting to the lowest number in seven years, CBRE data showed.
Ms Wales said Park Regis Sydney’s trading performance is growing, underpinned by the strength of the Sydney accommodation market.
“Two competing hotels in the immediate precinct were compulsorily acquired to make way for the development of the new Sydney Metro. As a result, the Park Regis Sydney is now poised to dominate the midscale CBD hotel market,” she said.
IProsperity bought the asset for $46 million in 2016 from Staywell Holdings, a subsidiary of the Japan-based Prince Seibu group.
It also bought Sydney’s 333 Kent Street for $88.88 million with Bridge Capital in the same year, with plans to redevelop it into a luxury hotel.
The hotel is being offered for sale with a management agreement with Staywell. The management agreement provides an annual underwrite of the trading performance until the end of 2021.
Expressions of interest close March 13.