Perth's Sullivans Hotel to get an 'executive' revamp

Under their 15-year operating contract, Argyle and Capital Bay will rebrand Sullivans Hotel into a 4-star Ausotel By Argyle King’s Park, turning the formerly family-run hotel into a contemporary executive hotel.

This will require major renovation of the current 3-star property that was built in 1974 and has 71 rooms, a restaurant and bar, a swimming pool and guest parking. It sits on a 3098-square-metre site next to Kings Park, overlooking the Perth CBD. It will re-open in July next year.

Capital Bay is eyeing other properties in Perth and in Sydney and Melbourne and the two companies are likely to continue their partnership for further hotel openings.

Capital Bay has embarked on a global expansion plan and is open to other investments, underlining the growing appetite of global investors for Australian hotels, particularly in the repositioning of older-style hotels.

While there is a small trace of oversupply of rooms in Melbourne, there is still a shortage of rooms – especially the more affordable mid- and upper mid-scale room types – in Sydney.

“I get approached by many investors particularly from China, Indonesia and Singapore looking for investments,” Argyle chief executive Kevin Zhang said.

“While capital is not a problem, they say the main difficulty is not knowing how to break into the main gateway cities.”

“For most, they are keen on repurposing existing hotels because a new development is too long a cycle for them. Many are also keen on starting a hotel REIT.”

For the Sullivan family, who has owned and operated the property for 30 years, a much-needed retirement is in store after selling their property for $11.4 million through JLL’s Nick Agapitos and Sean Flynn.

Since its 2002 start, Argyle has found success globally running over 100 hotels and resorts across the Asia Pacific, but has not run a single hotel in Australia. It does, however, have a marketing partnership with Australia’s Metro Hotels.

Most of its eight mid-scale and upscale brands are in China. As one of the top ten foreign-owned hotel groups in the country – it won the NSW Premier Export Award in 2017 – its success recently caught the eye of New York-listed GreenTree Hospitality Group, which just completed the acquisition of a strategic stake in the group.