Impact Investment Group plans to buy Sydney hotel and offices

Impact Investment Group plans to buy Sydney’s Four Points by Sheraton, Central Park and some associated office space.

An artist’s impression of Four Points by Sheraton, Central Park being built on Broadway in the inner-city Sydney suburb of Chippendale.

Funds manager Impact Investment Group is planning its first hotel acquisition by buying Sydney’s Four Points by Sheraton, Central Park and some associated office space in a deal worth about $190 million.

Singapore-owned Frasers Property Australia and Japan’s Sekisui House are developing the luxury hotel and boutique office space as part of their long-­running $2 billion Central Park precinct in inner Sydney. IIG is a high-power Melbourne investment house owned by chief executive Chris Lock and Small Giants, a private investment company founded by Melbourne’s Berry Liberman and his business partner, Daniel ­Almagor.

Sealing the hotel deal would lift IIG’s property empire to more than $800m worth of assets.

The group, set up in early 2013, focuses on “impact investing” — an investment approach aimed at delivering competitive financial returns and social and environmental returns. It owns a wind farm through an unlisted trust as well as a solar energy infrastructure fund.

Under the deal, IIG will buy the 297-room Four Points by Sheraton, Central Park hotel and a 5400sq m office complex known as One Hundred Broadway.

The vendors and IIG have agreed terms and are believed to be finalising what will be Sydney’s largest hotel sale this year.

Real estate agency CBRE is marketing the office space and has received strong inquiries from prospective tenants.

The buildings are being built by Multiplex for completion late next year. The hotel was designed by British architects Foster + Partners to appeal to the growing ­cohort of travellers looking for options beyond the central business district.

Frasers Property Australia chief executive Rod Fehring ­declined to discuss the sale but the investment would be in keeping with IIG’s penchant for innovative investing.

IIG bought the second tower in Lendlease’s Brisbane Showgrounds project last month in a $140m deal that will see it develop Australia’s tallest engineered timber building. IIG will develop, lease and manage the 45m-tall 5 King and own the 10-level building on completion.

It has also acquired the Gold Coast Surgical Hospital in a deal worth more than $45m.

Mr Lock also declined to comment on the Sydney hotel deal but values in the sector are surging and operator Marriott International, which last year bought Starwood Hotels & Resorts, is capitalising by opening new properties.

Singapore-listed developer Hiap Hoe opened the Four Points by Sheraton Melbourne Docklands this week.

An analysis by Savills shows the hotel property sector is outperforming other property classes, with Sydney and Melbourne the standout performers.

“Chinese visitor growth of 22 per cent is the dominant contributor to this stellar performance, which is being driven by a growing Chinese middle class having access to increased air ­capacity between China and Australia,” Savills managing director of hotels Michael Simpson said.