Publishers Hotel redevelopment shelved by Punvec Group

A $90m plan to build two towers on a historic CBD location has been dumped, with the site being put on the market.

Plans to build two towers on the former Publishers Hotel site in the CBD have been shelved, with the developer behind the proposal listing the property for sale.

Melbourne’s Punvec Group had been planning a $90m project comprising two 19-storey buildings – a 150-room hotel on Franklin Street and a second tower with 96 serviced apartments behind it.

The company won planning approval for the project in October last year.

However international property firm JLL started marketing the site on Tuesday as a “unique opportunity for developers to acquire prime real estate” in the CBD.

Punvec Group chairman Rupinder Brar said strong demand for Adelaide real estate had prompted the decision to sell.

The Publishers Hotel building on Franklin Street.

“We were getting so many calls – the Adelaide market is hot and people were asking us if we would sell,” he said.

“The hotel market will be back (from impact of COVID-19) by the time it’s built. Our planning permit on the ground floor meant someone could set up a jazz bar or something like that – Franklin Street and the streets behind have lots of cool bars and restaurants.

“Let’s see what we get and if we don’t sell then we will do the construction.”

The Publishers Hotel closed in December 2019, when Punvec paid $9.2m for the 2111sq m site.

The existing planning approval includes the retention of brick warehouse facades along Tatham and Cannon streets, and two towers scaling 68 and 66 metres over a common podium.

Artist’s impression of the approved development of the Publishers Hotel site. Supplied by Hassell

Demolition of the more than 100-year-old Publishers Hotel building – the original home to newspaper The Stock Journal – would make way for the entrance to the hotel, while the plans also included a pool, spa, gym, cafe, restaurant and bar, and 700 sqm of retail areas.

JLL head of sales Roger Klem, who’s leading the sale campaign, said the property came with a liquor licence, enabling the purchaser to generate additional income before a potential development of the site.

“One of the towers is 66 metres and the other is 68 metres, which is a pretty good approval for that location smack bang between Chinatown, the Adelaide Central Market, the university and the medical precinct on North Terrace,” he said.

“It’s a pretty big approval and the groups that typically undertake these sorts of developments in Adelaide are either the interstate institutions or offshore private groups.

Artist’s impression of the two towers proposed for the Publishers Hotel site. View looking east. Supplied by Hassell

“The Ginos Group is about to start work on their hotel project on Pulteney Street, the Sofitel is just about finished – people are still talking about hotels. The vaccine is starting to roll out and there doesn’t seem to be any hesitancy in terms of access to market.”

Despite the potential sell-off of the Franklin Street site, Mr Brar said his company remained interested in investing in the Adelaide property market.

“We would like to invest in Adelaide – the residential market is very hot and we do commercial as well,” he said.

“We’re doing a residential subdivision in Melbourne with 500 lots and we would like to do something similar in Adelaide.

“South Australia was very good in handling COVID and the government is encouraging a lot of investors. When we settled (on Franklin Street purchase) there was no stamp duty and there’s a lot of migration as well.”

Expressions of interest in the Franklin Street site close on April 16.