Meriton looks to ditch apartments for hotel rooms at its $152m Sussex Street development in Sydney
Meriton Group is looking to convert its $152 million Sussex Street development, in Sydney’s CBD, into a 32-storey hotel skyscraper, as the city’s tourism accommodation bursts at the seams.
The current approved development at 230-238 Sussex Street consists of 201 hotel suites between levels one and 16 and the rest of the tower would be taken up by 102 residential apartments.
But last week, Meriton, led by Harry Triguboff, lodged plans with the City of Sydney to change the use of levels 17 to 32 to hotel accommodation, eliminating all apartments from the mix.
Development costs for the Sussex Street project are an estimated $152 million. Photo: Supplied
This would bring the number of hotel suites up to 303 – 99 studios, 137 one-bedroom, 47 two-bedroom and 20 three-bedroom suites, with one being retained as a two-storey penthouse, planning documents show.
There will also be parking for 83 cars and one retail space.
The plans come as Meriton nears the end of construction, with completion scheduled for October 2018.
A Meriton spokesperson said the company is “confident” about residential apartment sales “as well as hotel suites”.
“We believe in our portfolio we need more hotel suites at this stage.”
The 32-level tower being constructed at 230 Sussex Street will have no apartments if the plans are approved. Picture: Supplied
Australia clocked in 5500 new hotel rooms and serviced apartments delivered in 2017 – a 2.3 per cent increase to total stock, a recent Deloitte Access Economics report found.
Developers aren’t letting go of the opportunity. Many are converting their residential developments into hotels, especially in Sydney and Melbourne, where off-the-plan apartment sales have slowed.
The number of hotel rooms is forecast to grow by 3.8 per cent to 102,710 across Australia’s major cities in the 2018 financial year, according to hotel consultants Dransfield’s Hotel Futures 2018 report, attributing this to “several residential projects (switching) to short-term accommodation on or close to completion”.
“Occupancy levels are likely to be abnormally high averaging over 80 per cent and rarely below that level,” the report said.
BPM Corp’s soon-to-be-built 130-room hotel “Slender Tower” in Melbourne’s CBD, which is on the market for $50 million, originally had a planning permit for an 89-apartment complex.
Little Projects is another developer that has abandoned residential redevelopment plans on 9-27 Downie Street, Melbourne, for a 278-room hotel.
Nationwide, Tourism Accommodation Australia data shows 40,204 rooms across 200 hotel projects are in the pipeline until 2025, making it “the most extensive and comprehensive hotel rejuvenation phase in Australia’s tourism history”, according to the body’s chief executive officer Carol Giuseppi.
Meriton bought 234-238 Sussex Street for about $60 million in 2014 and the Foley Brothers warehouse at number 230 for $15 million in the same year.
The hotel is expected to open in 2019.
