Woolbrokers Arms Hotel in Sydney's Pyrmont could make its owners $2 million in less than a year

Colliers International selling agent Miron Solomons told Commercial Real Estate that the current owners did not do any upgrades to the property in the 11 months they owned it.

It has been running as a 27-room bed-and-breakfast hotel. Photo: Supplied

He said the strong capital growth was thanks to the billions of dollars being deployed on the revitalisation of Darling Harbour, the International Convention Centre, and the light rail.

“Capital growth really is co-dependent on that infrastructure; all these amenities being built around (the hotel’s) doorstep are pushing those values up,” he said.

“Take aside the fact that you’re really 100 metres from Sydney Harbour, everything around you is, in a sense, organically being improved.

“When you have that infrastructure, public amenity, the transport, money being spent on all these facilities, it obviously underpins intrinsic value.”

The budget hotel, on a 442-square-metre site, currently has 27 rooms but plans are being drafted for it to be reconfigured into a 38-room property, though no proposals have been officially lodged yet.

Zoned for mixed-use development, it could also be converted into a modern boutique hotel, residential or office project, with a 12-metre building height.

The agents say it is time for the building to be refreshed. Photo: Supplied

The hotel still retains the character of another era. Photo: Supplied

“The unique thing is it’s so diverse for multiple uses. Right now, it’s a hotel and it’s got a rich history that really captures the transition from what Pyrmont was to what it is now, which is Sydney’s tech hub,” Mr Solomons said.

“It’s probably time for this building, which is an icon, to really have a new lease of life.”

Prospective buyers of the hotel include value-add specialists, developers, investors, hotel operators, “trophy hunters” and international buyers, he said.

Co-agent Ray Larkin, from Manenti Quinlan & Associates, said he was seeing most of the interest coming from overseas investors, as well as hoteliers and boutique operators.

“It’s only been on the market coming up 24 hours, I’ve probably already had 25 calls,” he said.

The property comes with a courtyard with seating for 23 people. Photo: Supplied

The building is currently leased for $450,000 a year on a five-year term until April 2023. It can also be acquired with vacant possession, which would suit owner-operators.

The property, which was completely refurbished in 1991, comes with a guest dining room with seating for 43 people and a communal courtyard.

Sydney hotels had an average occupancy rate of 87.8 per cent in the 2017-18 financial year – the highest out of all capital cities, according to Colliers International data. The occupancy is not expected to change for the 2018-19 financial year.

And boutique hotels account for about 10 per cent of the national accommodation pipeline – surging up from below 3 per cent in 2012.

The property occupies a corner site in Pyrmont. Photo: Supplied

Mr Solomons said heritage buildings with the look and feel of another era would always appeal to buyers, especially if it was in a “good location”.

“Character (buildings) that have such good old bones, you can never replace them.”

Constructed in about 1886, it was built as a suburban hotel servicing the local workers at the woolstores on Harris and Pyrmont streets as well as the wharf, which is now Darling Harbour. It also provided accommodation for visiting wool buyers.