Deal for Twiggy to buy Astoria Waldorf hinges on final price

The prospective high-profile deal has Andrew Forrest paying up to $2.6m per room for the yet to be built Waldorf Astoria fronting Circular Quay.

The hotel is part of a larger development that will also include super luxury apartments, which Lendlease says it will start marketing by the end of this year. Picture: Supplied

Andrew Forrest continues to negotiate his highest profile real estate purchase to date – buying the yet to be built Waldorf Astoria hotel fronting Sydney’s Circular Quay – for a price of up to $572m.

The prospective deal is being negotiated at a rate of up to $2.6m for each of the 220 rooms in the luxury six-star hotel which is being developed by Lendlease as part of its $3bn One Circular Quay development, according to sources close to the deal.

Lendlease and Mr Forrest’s property division Fiveight Pty Ltd declined to comment on the deal on Friday.

As Australians head offshore to holiday in Europe, Asia and North America, in a seeming counter-cyclical move, Mr Forrest has been amassing hospitality assets. Last November he paid $42m for Lizard Island in Far North Queensland through his private investment company Tattarang.

Buying the yet to complete Sydney hotel would give Mr Forrest one of the most prominent buildings in Circular Quay, with the price per room on the hotel expected to trounce any other in the country. However, the negotiations continue to hinge on the final pricing.

The purchase by Andrew Forrest could spur a new era of local ownership of hospitality assets. Picture: Supplied

Either way the luxurious Hilton-owned Waldorf Astoria hotel will be Australia’s most high profile hotel, with room rates expected to soar above the rival Park Hyatt on Sydney Harbour.

The hotel is part of a larger development that will also include super luxury apartments, which Lendlease has flagged it would start marketing by the end of this year.

The overall development will have two towers. The larger is expected to comprise a 59-level luxury residential tower, designed by the late award-winning Australian architect Kerry Hill, which is tipped to break sales records.

The second tower, designed by Kengo Kuma & Associates, will be the Waldorf Astoria hotel.

The entire project is on the former site of the landmark Gold Fields House and is earmarked for completion by fiscal 2027.

Competition for luxury assets has not paused in the face of rising interest rates, with wealthy buyers chasing trophy hospitality assets and opulent apartments despite the lack of mainland Chinese buyers.

A purchase by Mr Forrest could spur a new era of local ownership of hospitality assets, after a period in which locally listed firms bowed out and foreign purchasers dominated the hospitality sector.

The landmark nature of the property and Mr Forrest’s ability to put his stamp on such a unique part of Australia are likely to be driving features of the purchase in addition to the compelling long-term property fundamentals.

Lendlease was advised by Michael Simpson of CBRE and Sam McVay of McVay Real Estate.

Lendlease produced a downgrade of its returns from its main divisions this year and its shares were heavily sold off this week.

But it foreshadowed it would recover by 2024 and would start developing more properties.