Local players tipped to make $210m bid for luxury Double Bay hotel

After legal battles over its future, Sydney’s InterContinental Hotel Double Bay is set for a revamp with a powerful group led by developer Allen Linz looking to buy.

Sydney’s InterContinental Hotel Double Bay is set for a dramatic revamp with a powerful consortium led by developer Allen Linz and longtime business partner Eduard Litver as well as United Cinemas chief executive Sam Mustaca believed to be in due diligence to buy the landmark hotel at a price of more than $210m.

In its glory days, the once world-­famous hotel hosted celebrities such as Princess Diana. A year later, in 1997, Michael Hutchence was found dead in one of the hotel’s rooms. The hotel hosted Elton John and Madonna when it was then known as the Ritz-Carlton.

Mr Linz of Rebel Property Group and Mr Litver of Capitel Group created development history in Sydney’s eastern suburbs with the development of the $450m Pacific Bondi complex a few years ago. They have since gone on to develop several boutique complexes.

The InterContinental Hotel is being sold after the owners, Melbourne developer Paul Fridman, who was recently bankrupted, and Sydney-based Bilal El-Cheikh, of Piety Group, became embroiled in a legal dispute over their stalled efforts to redevelop the Cross Street, Double Bay icon.

However, Mr Fridman, who was fighting the bankruptcy declaration, was not expected to walk away from the sale with a huge payout as he had already been paid out earlier, sources said. Mr Fridman did not return The Weekend Australian’s calls.

The Intercontinental Hotel in Double Bay. Picture: Christian Gilles

The vendors had been locked in a legal stoush in the NSW Supreme Court, having fallen out over their joint-venture agreement to develop the property and allegations of bills racked up by Mr Fridman during an extended stay in the property’s penthouse.

After years of battles over its future the hotel is likely to be overhauled to include apartments. The five-star, 140-room property has been mired in controversy for decades as a series of developers have proposed schemes to overhaul it.

Mr Fridman and Mr El-Cheikh lured top restaurateur Maurice Terzini to fix the hotel’s food and beverage offerings, interior designers to spruce up its furnishings, and architects to design 31 luxury apartments to capture Sydney Harbour views.

The court case pitted Mr Fridman’s companies against Piety Group, which was seeking to end an agreement that would have required them to overhaul the hotel into a major Australian landmark.

The pair purchased it for $178m in 2021 but instead decided to market the property via agents Colliers and CBRE.

In the court dispute, the pair traded claims about expenses each had incurred and over Mr Fridman’s extended stay in the hotel’s penthouse, which prompted claims of unpaid bills by his development partner.

Piety alleged that Mr Fridman stayed in the hotel’s penthouse, which charges $8950 a night, running up bills between January and May last year, for which he was invoiced but ­allegedly failed to pay.

He has denied the quantum of the bill and paid the sum into his lawyer’s trust account, according to court documents.

Mr Linz, who has registered a new company known as Rebel Double Bay, and Mr Litver could not be reached for comment.

In 2017, the hotel was bought by Chinese multinationals for about $140m. The two buyers – Shanghai United Real Estate and Zobon Real Estate Group – were among China’s largest consortiums to forge into Australian property and the purchase sparked hopes of a large-scale overhaul.

Shanghai United, set up by 10 of China’s top property firms, including Zobon, said at the time it had $2bn to spend over the next five years in Australia, but its interest in the market faded as the apartment boom ended.

It bought the hotel from Singapore’s Royal Group Holdings, which ploughed about $100m into buying and refurbishing the Double Bay hotel and reopened it after it was shuttered.

The Royal Group bought the former Ritz-Carlton Hotel for almost $60m in 2013, after a controversial period when it was owned by the failed Ashington Group and, later, by Scarborough Pacific Group, which was backed by British property tycoon Kevin McCabe and Victoria’s Alter family.