Sir Stamford falls to developers for luxury Circular Quay project
One of Sydney’s favourite hotels is to become the latest harbourside luxury unit block after being bought out by developers in a mega multimillion-dollar deal.
One of Sydney’s grandest old hotels, the Sir Stamford at Circular Quay, has been sold off to a developer for just over $210m and will be redeveloped as luxury apartments.
The hotel, overlooking the Royal Botanic Gardens sits adjacent to Circular Quay and the Sydney Opera House, is partly housed in a distinctive heritage building and was once a luxurious Ritz-Carlton.
It has been snapped up by JDH Capital, the developer behind the conversion of former public housing block, the Sirius Building, into luxury apartments, in a $210.5m deal.
The purchase will see another residential tower rise in the dress circle around Circular Quay with a series of high-end apartment projects going ahead even though the residential property boom has ended.
The hotel was sold off by Singaporean magnate CK Ow who held the hotel via the Singapore-listed Stamford Land Corporation. He last year toyed with selling his entire portfolio of Australian hotels before pulling that deal.
Even at that time developers were looking to carve off the prized Sydney hotel, which carries approval for a new residential tower, after the Singapore company won a legal battle against Mulpha, the Malaysian owner of the nearby Intercontinental Hotel which fought against the redevelopment on heritage grounds.
The 10-storey five-star hotel has 105 bedrooms built in 1990 but also incorporates the heritage listed former Health Department building on the corner of Albert and Macquarie streets. It sports a restaurant, bar, roof top fitness centre, pool and parking for 109 cars.
In 2020, Sydney council approved a concept building envelope for the development of the property into residential units and the project was on track for a design competition and building to kick off in October 2023.
Stamford estimated the development would cost more than $380m spread over three years with the project estimated to complete in 2026.
The sale is a windfall to Stamford which said the sale price was $120.5m higher than the latest valuation for the property.
The NSW government came under fire for selling the freehold of the Sir Stamford at Circular Quay to a company controlled by Mr Ow in 2013 for $16.8m.
That sale was completed without an open tender despite internal advice a direct sale could breach “ICAC guidelines” and came after senior staff at the NSW State Property Authority recommended a public tender process.
JLL Hotels & Hospitality is believed to have brokered the latest deal.
The apartments in the development should be snapped up. Despite interest rates soaring, wealthy buyers from around the globe, returning expats, and local downsizers who have ridden the property boom are buying units on Sydney Harbour in the belief that these properties will remain prized through the economic cycle.
Developers are moving on the trend. Just last month Lendlease swooped on the One Circular Quay project, which will include both a Waldorf Astoria hotel and luxury apartments, and it will bring them to market later this year.
JDH Capital’s conversion of the Sirius Building broke records with the penthouse selling for $35m and similar prices would be expected at the Stamford site.
The hotel sale is an about face from plans reported earlier this year when Mr Ow was planning a $1.4bn shake up of his Stamford hotel empire in Australia which was to see the repositioning of its leading CBD assets.
Stamford then flagged it was planning the spend about $780m on the redevelopment of the Stamford Plaza Brisbane and the Sir Stamford at Circular Quay in Sydney.
Both were identified by the company in the past as potential luxury apartment buildings and the company said it would also spend about $70m to upgrade the Stamford Grand Adelaide and/or the Stamford Plaza Melbourne, with about $640m to go towards “opportunistic real estate acquisitions”.
The project to convert the landmark hotel on Macquarie St into a top end apartment block would see part of the hotel’s sandstone facades retained.
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