Boutique Surry Hills hotel sells for $30 million

In a first for Sydney, a hotel built using a new form of sustainable wood has changed hands as investors continue to enter the inner-city commercial real estate market.

A new six-storey hotel in Sydney’s inner city has been sold to a local hotelier for $30 million.

Built by Sydney-based Alessi Design and Build, much of the structure uses cross-laminated timber giving it a smaller carbon footprint than concrete, a first for a commercial hotel in Sydney.

The hotel at 202-210 Elizabeth St, Surry Hills has 38 rooms and is being sold off-market through Colliers National Director Asia Markets Joseph Lin, along with Paul Fischmann’s 8 Hotels and real estate investor and developer Jonathan Hasson.

The hotel includes two ground floor retail spaces, three outdoor terraces and a roof terrace overlooking the Sydney CBD.

“Given the post-pandemic recovery story, savvy investors remain very interested in Sydney commercial real estate in prime locations,” said Mr Lin.

“It is not difficult to understand the acquisition strategy of this newly completed hotel in the heart of the Tech Central district, the largest technology and innovation hub and urban revitalization project in the near future.”

The hotel took three years to build, with construction initially starting just after Covid restrictions were lifted.

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Colliers Head of Hotels Gus Moors said the sale was testament to the strong long-term performance of the Sydney hotel market.

“The recovery in commerce is getting better every month, with city occupancy now moving towards 70 percent and average rates approaching $280 in the CBD.”

“To put that into context, the Sydney CBD had a rate of about $250 for the full calendar year of 2019.”

Looking to the future, Mr Moors pointed to the return of business and international travel, alongside the rise of cruise ships, as a promising sign that Sydney’s hotel and leisure industry will recover.

“When you consider that hotels price their inventory on a daily (if not hourly) basis, it’s an asset class that can withstand an inflationary environment well.”

“As a result, we see that the capital markets are now strongly focused on the sector.”
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Originally published as Boutique Surry Hills hotel sells for $30 million

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