Built, Irongate submit $800 million Sydney hotel bid
Built and ASX-listed Irongate Group have lodged plans under NSW’s unsolicited bid program for a 49-level, $800 million luxury hotel occupying two neighbouring sites – one of them government-owned – on central Sydney’s Phillip Street.
Construction company Built and Irongate, created by bankers from the former Investec Australia business, already own the 14-storey office building at 52 Phillip Street and propose a 5- or 6-star hotel on the site that would cantilever over the existing heritage building and make it part of the hotel.
The state government has not yet agreed to the proposal, but Built is counting on its track record in preserving heritage buildings to secure approval. It says it will restore the original character of the building- until recently a home for the state’s department of planning, industry and the environment – and replace its original heritage joinery.
“This development represents a unique opportunity to give these buildings new life and make them accessible for locals and tourists, increasing public use and foot traffic,” Built chief executive Brett Mason said.
“Our plans for a luxury hotel mixed-use development will do this while preserving the important history of 50 Phillip Street that reflects the unique 19th-century architecture of the former NSW colony.”
The 186-metre tower, designed in concept for the development application by architecture firm fjmt, will have views of the top of the Sydney Harbour Bridge, the Opera House and Sydney Heads. The combined development site would be 1681sq m.
The joint venture was able to make it viable because it already owned the neighbouring site.
Construction funding and final ownership of the planned building are not yet decided. Mr Mason said it was likely to be a fund-through arrangement, similar to the $180 million deal Built struck with US institution Nuveen in 2018 when it sold the Clarence Street substation project that will soon be complete.
As part of the current stage-two application process, the Built-Irongate joint venture is looking for a partner to operate the luxury hotel, and has engaged CBRE Hotels to find one.
“We’ve got a list of global luxury operators lining up to take a look at it,” Mr Mason said. “They all want to be in Sydney, but haven’t been able to find the right site.”
The final design will be decided by a design competition, as required under state government rules.
“Sometimes the incumbent architect gets it, sometimes they don’t,” Mr Mason said.
Irongate chief executive Graeme Katz said the group was proud to partner with Built on the project.
“The development is one of the seed assets of our recently launched Templewater Australia Property Fund,” Mr Katz said.
“TAP forms part of Irongate’s wholesale funds management platform and shows the breadth and depth of our property investment capabilities in Australia.”
