Virtical offloads The Republic Hotel in Sydney CBD as development plans wound back

Embattled developer Virtical has sold off The Republic Hotel in the heart of Sydney’s CBD for about $32m, putting an end to its ambitions of redeveloping the famed site.

Ben Wilmot and Lisa Allen

2 min read

September 19, 2024 - 6:12PM

The Australian Business Network

Virtical bought The Republic Hotel in Sydney last year for about $38m.

Embattled developer Virtical has sold off The Republic Hotel in the heart of Sydney’s CBD to the Thomas family for about $32m, putting an end to its ambitions of redeveloping the famed site.

The sale marks yet another step out of the market by the company, which is also offloading a city hotel in Melbourne, as its former director Mark Toma fights a separate court case over a soured pub deal on Sydney’s Oxford Street.

Mr Toma’s companies struck an arrangement to buy Kinselas and the Courthouse Hotel in Sydney’s Taylor Square for $61m last year. But its deal to buy them from MA Financial Group has ended up with Mr Toma fighting a court action.

As the purchasers’ guarantor, Mr Toma was last month ordered to fulfil his obligations under the sales contracts. But he has been in the NSW Supreme Court appealing that decision.

The Republic Hotel was bought by Virtical in August last year for about $38m and industry players said it was a rare case of a pub selling at less than its purchase price, with its ownership period coming as prices came under pressure.

Big publicans are now back in the market but Virtical has been under pressure and has been selling properties as it winds back its high-rise ambitions across the country.

When it bought The Republic Hotel last year plans were afoot for a redevelopment, but the new owners are experienced publicans and are expected to keep the property running.

Virtical had bought the popular pub from Singaporean investment house SC Capital, which in turn bought it in 2017 from publican Patrick Ryan and his family for about $35m.

The Sydney institution has a history dating back to 1865 and is near an office block that SC Capital sold to private developer Holdmark for about $210m after it abandoned its plans for a striking luxury hotel and office project.

It trades across four floors, including a public bar and gaming room with 28 machines on the ground floor; Republic Dining on the first floor; events facilities on the second floor; and the Taylor’s Rooftop Bar.

At the time it bought The Republic, Virtical was on a buying spree and considered building a hotel above the Sydney site using its Adelphi brand. The company had proposed a development plan to add 14 storeys to the Republic Hotel, featuring 98 hotel rooms.

Virtical managing director John Palasty said last month that the developer had invested $10m in the just completed renovation of the Republic Hotel, as well as on the ongoing, extensive refurbishment of the Metropolitan Hotel on George St, which is due to re-open next February.

But the property group is also selling its Adelphi Hotel on Flinders Lane in Melbourne. When it put that on the market last month it said it had been partly refurbished over the last 12 months and had solid trading numbers, despite the restaurant and bar being closed over the last three months.