Hemmes lifts lid on mega redevelopment

Justin Hemmes will proceed with an ambitious $1.5bn mixed-use project after securing the CBD site near the Ivy.

Justin Hemmes: ’I want to revive how we work, play and socialise’. Picture: Brett Costello

Pub titan Justin Hemmes’s $1.5 billion redevelopment will dominate a Sydney city block, taking up to seven years to complete, with world-class local and international architects engaging in a design competition for the proposed five-star extravaganza.

In his first interview on the yet-to-be-named project, the billionaire said he planned a 52,500sq m tower ­opposite Wynyard Station, amalgamating his Ivy party palace and adding a substantial office component, a luxury hotel and an opulent hospitality precinct.

“I want to revive how we work, play and socialise,” Mr Hemmes told The Australian last night, having settled the purchase of the site late yesterday. He declined to reveal how much he paid for the George Street site.

But sources said the site — ­occupied by a St George Bank and sold by Westpac and a shelf company called Frisbee Pty Ltd — would have cost the billionaire more than $80 million.

Mr Hemmes estimates that gaining planning approval for the project could take up to three years and construction could take up to another four years.

“I have time to do this. I have time to get it right, time will create a better result. I am not under pressure. The business is going well,” Mr Hemmes said.

The Merivale heir would earn income on the site during the design and planning stages from the incumbent St George Bank branch.
But in a reversal of plans initially formulated in December, Mr Hemmes said he would not be undertaking any residential apartments.

“I am thinking no apartments,” Mr Hemmes said.

In the biggest bet of his career, Mr Hemmes also wants a development partner involved, who would have to “embrace his concepts” and “be very strategic”.

“I will look for the right partner to share the vision,” he said.

The pub baron, with a fortune valued at $1.05bn, went on a pub-buying spree last year and now controls about 70 pubs, restaurants and hotels. He paid $21 million for the Collaroy Hotel on Sydney’s northern beaches, about $23m for the Vic on the Park in inner-west Marrickville and more than $30m for the Royal Hotel on Bondi Road.

The redevelopment of the ­George Street site, certain to rival nearby Barangaroo’s glitzy entertainment and office precincts, will probably include an expanded Ivy nightclub.

Mr Hemmes’s investment play is understood to be aiming to capitalise on the surging value of commercial office towers, which are trading at record levels as city rents have soared, even outpacing the strong performance of the hotel sector.

Mr Hemmes’s new property fronts 312-318 George Street.

Tenders, handled by selling agents McVay Real Estate, closed last August.

Mr Hemmes is not alone in taking a mixed-use approach to his new site.

Two of the biggest developments under way in Sydney ­include plans by Singapore’s SC Capital for a $700m mixed-use hotel and office tower at 4-6 Bligh Street. SC Capital’s proposed skyscraper will incorporate a 400-room Hyatt-managed hotel.

The private Meadowbank-based Billbergia has also won ­approval to build a 48-level North Sydney hotel and office skyscraper.