Sunmoon rises in Scarborough as investors eye development

According to selling agent from CBRE Hotels’ Ryan McGinnity, the 3035-square-metre site is zoned Mixed Use Commercial/Residential R160, giving it plenty of development upside.

He said that zoning enabled further development of up to 18 levels of hotel suites and apartments – including cafes, bars and commercial uses – subject to approval.

An artist’s impression of the Scarborough redevelopment transit hub. Image: Metropolitan Redevelopment Authority

CBRE Hotels’ David Kennedy said there was income from the hotel could be holding income pending major development work.

“It is currently split into two buildings with the restaurant, bar and function rooms at the front and 45 suites in the rear building,” Mr Kennedy said.

“My way of thinking is you would develop to the maximum height by bulldozing the back and building, say, a 150-room hotel and then massaging the front to give it a more modern look.”

The once high-rise shy Scarborough, which fought against Alan Bond’s 24-level Observation City – now Rendezvous Hotel – in the 1980s, is now more open to the idea.

An artist’s impression of the Scarborough redevelopment. Image: Metropolitan Redevelopment Authority

The MRA is working with the City of Stirling to transform Scarborough with more than $100 million to be spent over the next two years on new public spaces, beach access and community facilities.

The public coffer though is only part of the picture with much of the redevelopment area privately owned.

MRA chief Kieran Kinsella said the authority was working to deliver a more flexible planning framework that would facilitate private investment and increase densities in key areas.

“We predict that over 2500 new dwellings and 26,000 square metres of commercial space could be generated on private land within the redevelopment area,” Mr Kinsella said.

“Some increases in height limit will be considered, up to a maximum of 18 stories, where development applications can demonstrate outstanding performance against design and public amenity criteria, meaning that community benefits such as the provision of affordable housing or activated ground levels offering retail or entrainment options must be demonstrated for extra height to be approved.”

Scarborough Beach in Perth. Photo: Metropolitan Redevelopment Authority

The taller buildings will be focused around the West Coast Highway and Scarborough Beach Road intersection, with heights transitioning down into the surrounding neighbourhood.

Preparation works have already begun on the creation of Scarborough Square, Sunset Hill, an intergenerational plaza and a beach hub, along with the installation of new tree-lined pedestrian promenades, public art and public play spaces. Works are expected to be largely completed by the 2018 Australian Surf Life Saving Championships.

Mr Kinsella said the redevelopment was expected to attract hundreds of millions in private investment.

• View all properties for sale in Scarborough, WA

Mr Kennedy said the opportunity to acquire beachside real estate and a profitable hospitality operation was expected to be of strong interest to local, interstate and international group investors.

CBRE has had recent success in the area with the Indian Ocean Hotel in Scarborough currently under contract for $13.6 million after a four-week expressions-of-interest campaign.

The Sunmoon Boutique Resort includes a 24-hour reception, gym and outdoor pool, restaurant and bar, function-meetings rooms and secure undercover parking.