Chinese developer Shanghai United eyes Sydney hotels

One of China’s largest real estate developers and investors, Shanghai United, is heavily investing in Sydney hotels.

CEO Yangdong Xu says Shanghai United has put together five Sydney projects in a little over a year. Picture: Hollie Adams

One of China’s largest real estate developers and investors, Shanghai United, is heavily investing in Sydney hotels, confirming it is in negotiations to buy the $140 million InterContinental Hotel in Double Bay and signing contracts to develop a 120-room five-star hotel in the heart of the city.

Shanghai United CEO Yangdong Xu said the company, which has global development arms in Europe, the US, Southeast Asia and now Australia, had a long-term development strategy for capital cities including Sydney, Melbourne and Brisbane.

“We will invest and develop over the long term in Australia,” said Mr Xu, speaking through an interpreter yesterday.

Shanghai United selected Accor from a field of American, French and Spanish hotel management companies to manage the new $120m-plus hotel in Sydney’s Castlereagh Street as part of a $380m mixed-use development. To be known as The Porter House Hotel McGallery by Sofitel, the hotel, which is designed by Candalepas Associates, is being developed by Shanghai United and will include 131 luxury apartments fronting Castlereagh Street. Shanghai United is also planning commercial and retail projects elsewhere in Australia.

Accor chief operating officer Simon McGrath said the McGallery was the first boutique hotel project in Sydney and would be developed on an 1870s heritage listed site. “This will reshape hotel development in Sydney,” Mr McGrath said.

Apartment owners will be offered dedicated hotel room service and in-residence catering.

Mr Xu said Shanghai had amassed five projects in Sydney in a little over a year. The Castlereagh project, with construction expected to commence early next year, was its key asset.

Shanghai United has built eight five-star hotels in China in the past 20 years, adding that the McGallery in Sydney would bring life back to Hyde Park.

Mr Xu said Australia was a ‘‘first choice’’ for China because “we like the policies, economy and environment”.

“The most important city is Sydney, but we also like Melbourne and also Brisbane and we are going to do more projects.”

“We are looking for fresh opportunities. Our shareholders have a big project in Melbourne, for instance,” he said.

Mr Xu said a Shanghai United shareholder paid $267m to buy part of the old World Trade Centre on the Yarra River earlier this year.

Mr Xu confirmed Shanghai United was in negotiations to buy the 140-room InterContinental Hotel in Double Bay, as revealed by The Australian recently. But he said it would take months before an announcement was made.

“We are negotiating the terms of the agreement,” he said.