Buyers circle Sydney's revamped $40m-plus Clarence Hotel with speakeasy bar
A reimagined boutique hotel born from a heritage wool store in the heart of Sydney’s CBD is seeking buyers in the mid-$40 million range, as high-profile hospitality operators ink deals to take the reins of a speakeasy bar and restaurant.
Newly revitalised after an impressive overhaul, The Clarence Hotel – with 50 luxurious guest rooms and a brand-new gym – is centrally positioned in a hospitality precinct known for its secret laneway bars. At 193-195 Clarence Street, it sits near the corner of King Street, just 500 metres from Darling Harbour and within walking distance of shopping and transport.
The hotel reopened in January following a two-year redevelopment funded by its owner, a Los Angeles-based investor. It now offers Accor-operated accommodation that blends “contemporary design with cozy charm”, and will be officially launched early next year.
“It’s effectively a new boutique hotel with contemporary, modern furnishings,” says Mark Durran of Savills Sydney. “We’re just leasing … the restaurant and the speakeasy bar. We have some high-profile operators coming in.”
Durran says the restaurant is likely to become an Italian brasserie, but can’t reveal further details about the retro-style speakeasy – a style known for unbranded entries – just yet. “They’re just working on those concepts of the present,” he says.“That would then allow the hotel to be launched properly around February, March next year.”
The property, set on a 303-square-metre block, has had several lives since its beginnings as a wool store, becoming an office building before being redeveloped into a mid-market hotel known as the Breakfree on Clarence.
The Breakfree ran for around 12 years before its 1260 square metres of interior space was upgraded and food and beverage spaces were created.
The restaurant will occupy a ground-floor space of 150 square metres, with the bar located on a lower-ground area of 81 square metres, offering buyers additional diversified income.
Motivated by the immediate location’s transformation into a vibrant bar and dining precinct, and spurred on by the arrival of tech giant Apple’s new store, the owners completely overhauled the bathrooms and guest rooms, Durran says. They collaborated with Chanda Interiors and building company Reward Group to create “stylish sanctuaries”.
Durran says the area has become well-known due to its many laneways, and “all these hidden bars have opened up”.
Private investors and investment funds, especially those who have experience in the sector and are looking to add a rare Sydney freehold hotel to their portfolio, have shown interest since the campaign launched.
“I’ve got a few buyers circling it at the moment in the mid-$40 million range,” Durran says, adding: “There’s also been a handful of newer entrants seeking to enter the sector.”
The property is well positioned to capitalise on Sydney’s growth, with the hotel market continuing to strengthen due to a lack of new supply and high construction costs.
“In Sydney, occupancy rates are in the mid-to-high 80 per cent currently, and look to strengthen further next year due to the lack of other new hotel supply openings,” Durran says.
“Existing hotel assets have become more highly sought in Sydney.”
Wool stores were once symbols of Australia’s prosperity, but the grand industrial stores fell into disrepair after the post-1950s decline. In recent years, however, many have been revived by developers and reimagined as striking residential and creative commercial spaces, ranging from thriving cultural venues to office and retail precincts.
The property is for sale via an expressions of interest campaign through Savills Sydney.
