Sirius developer buys Sydney's Sir Stamford hotel for $210m
JDH Capital, the investment firm redeveloping Sydney’s Sirius building, has struck a $210.5 million deal to buy the Sir Stamford Circular Quay hotel on Macquarie Street.
The acquisition – via an exercisable option agreement with Singapore property tycoon CK Ow’s SGX-listed Stamford Land Corporation – will give JDH Capital the platform for a $380 million luxury apartment development on the site of the 10-storey hotel, close to the Sydney Opera House and opposite the Royal Botanical Gardens.
“It’s another opportunity in a key location for a luxury residential project that will capitalise on the Macquarie Street location and the views,” John Green, development director at JDH Capital, told The Australian Financial Review. “It’s a great site for a great project.”
It will be a third luxury residential development for JDH Capital, which is led by former Macquarie banker Jean-Dominique Huynh and backed by high net worth investors.
Its controversial redevelopment of the brutalist Sirius Building, which it bought for $150 million from the NSW government in 2019, notched up a $35 million penthouse sale last year and another smaller penthouse sale for $19 million.
JDH Capital is also transforming the former Vibe Hotel at Rushcutters Bay, which it bought for $120 million, into high-end apartments.
Its pending acquisition of the freehold five-star Sir Stamford Circular Quay at 93-97 Macquarie Street includes the heritage listed former Health Department sandstone building on the corner of Albert and Macquarie Streets.
In a statement to the Singapore Stock Exchange, Stamford Land said the sale price was $120.5 million above its most recent company valuation of $90 million as of March 31.
Stamford Land had sought to divest the Sir Stamford and its other Australian and New Zealand hotels as a $1 billion portfolio offering last year, but abandoned the sale and focused on redeveloping the Sydney hotel as well as the Stamford Plaza Brisbane.
Redevelopment of the Sir Stamford into apartments at a cost $380 million was due to begin next year and take three years. The Singaporeans had obtained phase-one approval for redevelopment of the property into residential units and was expected to complete phase two, which incorporated a design competition, by January.
In explaining its decision to divest the hotel, Stamford Land said the net cash that the company stood to receive from the sale was more than 76 per cent higher than from the redevelopment.
The divestment – brokered by JLL – will leave Stamford Land with ownership of five hotels in Australia and one in New Zealand, offering around 1700 rooms.
The company was hit hard by the pandemic as hotel income dried up due to government restrictions and lockdowns. Revenues and profits recovered strongly in the year to March 2022.
In February, it raised $248 million via a rights issue “to cope with the challenges” still being faced by the hospitality industry.
Mr Ow, who owns 41.7 per cent of Stamford Land, said in the company’s 2022 annual report that the “hospitality industry will find it difficult to return to pre-pandemic levels of performance in the short term”.
