A new $311.8-million 55-storey hotel and commercial skyscraper could be on the horizon for the Sydney CBD, adding to the much-needed pipeline of accommodation and offices in the city.
Singapore-based investment group SC Capital Partners have lodged a planning proposal to the Department of Planning and Environment to redevelop the 1216-square-metre site at 4-6 Bligh Street, where an 18-storey commercial building, Bligh House, currently stands.
If approved, the 205-metre building could be one of the tallest towers of its kind in the CBD and would yield 24,825 square metres of gross floor area, planning documents show.
The development would have a 10-storey podium for mostly commercial offices, entrance lobbies for the hotel and offices, a two-storey gym and a 25-metre semi-outdoor swimming pool.
It would add 6137 square metres of A-grade commercial floor space to the CBD office supply pipeline.
Above that, the hotel, expected to be four to five stars, will include 407 rooms across 37 storeys, plus four rooftop levels featuring a publicly accessible landscaped terrace, restaurant, bar and function space.
Four underground levels will provide 17 parking spaces.
The developments plans are further indicators of the strong demand for upscale hotels in Sydney CBD. Occupancy rates in Sydney are about 90 per cent, according to JLL Hotels and Hospitality, which the agency’s vice president Andrew Langford describes as “pretty much maxxed out for a hotel”.
“From an operations point of view, you don’t want to be any higher than that,” he said.
Room night demand in Sydney shot up 4.3 per cent in the past year, while supply increased by 3.1 per cent, Tourism Accommodation Australia data shows. More than 3000 rooms were in construction or built in the past six months, while 4633 rooms have obtained planning approvals and a further 4392 are still in the planning stage.
“We foresee that if this pipeline goes ahead, it will meet demand,” the industry body’s chief executive officer Carol Giuseppi said, adding that there were concerns on whether all of that supply would come to fruition.
SC Capital Partners bought the Bligh Street asset for $68 million with investment firm Fortius Funds Management in 2015 from Cromwell Property Group, which had bought it for $58 million two years prior from the NSW government.
It has since been leased to NSW government agencies generating a net annual income of about $5 million.
The 1960s Bligh House was constructed in the building boom in central Sydney after World War II. The rise of the skyscraper in the city was due to changes to development policies at the time, which lifted building height restrictions to above 150 feet (45.7 metres) for the first time in 50 years.
After it was completed, Bligh House was the eighth tallest building in Sydney at 240 feet (73 metres). Currently, the tallest structure in the city is the Sydney Tower, standing at 309 metres.
SC Capital Partners also owns the office tower at 59 Goulburn Street which it bought in mid 2017 with Fortius for $158 million and another in south-western Sydney at 2-14 Meredith Street, Bankstown, which is on the market for about $80 million.
The Bligh House redevelopment plans are due to go on public exhibition in March if a Gateway determination is issued.