Hoi Hup buys Sydney hotel for A$202M

Singapore developer Hoi Hup Realty has paid A$201.8 million ($144.6 million) for a hotel in Sydney. This marks the firm's first hospitality acquisition in Australia. A statement from advisor JLL confirmed the deal.

Hoi Hup chairman Wong Swee Chun expressed confidence in Sydney's hotel market outlook. He cited strong demand, limited new supply, and attractive long-term growth.

Strategic Location in Tech Central

The 309-room hotel is at 88 Broadway within the Tech Central precinct. This state-backed area supports an economy worth A$42 billion and over 100,000 workers. Tech giant Atlassian is building its A$1 billion headquarters nearby. The location is a short walk from Central Station, Chinatown, and the Darling Harbour precinct.

Andrew Langsford of JLL said the hotel's position in the developing precinct and recent upgrades made it an attractive investment. JLL managed the sale with CBRE Hotels.

Property Features and Recent Upgrades

First opened in 2018, the Marriott International-managed property was recently enhanced by seller KSL Capital Partners. An under-used conference floor was converted into 12 new guest rooms. The ground-floor food and beverage outlet was also renovated. This aims to capture foot traffic from the nearby education hub.

The hotel's specifications are as follows:

Chippendale, where the hotel is located, hosts major universities within less than one square kilometre. The University of Sydney and University of Technology Sydney have a combined student population of about 125,000.

Sydney Hotel Market Context

The deal ranks as the largest in Sydney's hotel market since March. At that time, a joint venture paid A$390 million for the Novotel and Ibis hotels on Darling Harbour. JLL's Gus Moors noted that investment-grade hotel assets in Sydney are tightly held. The competitive sale process reflected strong investor interest.

KSL Capital Partners, based in Denver, Colorado, had acquired this Four Points by Sheraton property in 2021. Reports at that time indicated a price of around A$150 million.

Hoi Hup's Portfolio and Singaporean Activity

The Sydney hotel becomes the third in Hoi Hup's hospitality portfolio. The others are the Andaz Singapore and the Courtyard by Marriott in Novena, Singapore. The company is primarily a residential developer with 10 projects in Singapore. Its international holdings include three commercial buildings in London.

Hoi Hup's acquisition follows other Australian real estate deals involving Singaporean capital this year. These include OUE REIT's stake in Sydney's Salesforce Tower and GIC's office investment through a partnership with Investa. Other Singapore-based buyers have also been active in Perth, Melbourne, and Queensland's residential market.

The firm previously entered the Singapore hotel market in 2019. It purchased the 342-room Andaz Singapore for S$475 million.