KSL Capital splashes $150m for Jerry Schwartz’s Four Points by Sheraton, Sydney
Colorado-based tourism investor KSL Capital has fought off a slew of equity firms to buy the Four Points by Sheraton, Sydney at Central Park from private hotelier Jerry Schwartz in one of the year’s largest hotel deals.
KSL Capital, which also controls the Baillie Lodges portfolio including Longitude 131 in the shadow of Uluru, and New Zealand’s oldest and most celebrated luxury accommodation, Huka Lodge, is believed to be in exclusive arrangements to pay about $151m for the 297-room hotel, which Marriott will continue to operate under a long-term management contract.
The deal over the hotel, which is currently vacant, was negotiated by JLL Hotels & Hospitality Group’s Mark Durran, who declined to comment.
Sources close to the deal said the hotel’s marketing campaign attracted a lot of large players and equity firms, but there was a paucity of high-net-worth foreign individuals largely because of their inability to travel to Australia. As well, local high-net-worth people were constrained by the new equity tightening regulations of the big four banks.
Dr Schwartz would not discuss the Four Points by Sheraton deal, but he was effusive about his opposition to Mirvac’s redevelopment proposal at Darling Harbour, where he owns the Sofitel Hotel.
He is strongly objecting to Mirvac’s plans to demolish the Harbourside retail outlet and build residential and commercial properties on the site.
At an online symposium on Wednesday, Dr Schwartz said the general consensus was Mirvac’s proposed development was about its private interests, which was completely different to public interests. “The massive increase in usable floor space is not for the community,” Dr Schwartz said.
“It’s a desire of Mirvac to put as much into it as they possibly can. Harbourside is old and worn and needs to be refurbished, but there is no call to pull it down and replace it with a five-storey ‘monstrosity’ with very little public facilities.
“I have invested a large amount of money in a public development and it’s really upsetting that when I did buy it I did my due diligence and I read there was an act in 1984 which precluded residential development in Darling Harbour, and Mirvac is now trying to alter that.
“It is not fair that any developer can try to alter such an act, which gives enjoyment to those that have invested in the area.”
Mirvac chief investment officer Brett Draffen earlier this month said Mirvac had collaborated extensively with the NSW government and key stakeholders for more than four years to develop the Stage 1 DA envelope. “We have made significant amendments in response to the feedback received to maximise view sharing to all adjoining buildings, maximise the public domain outcome and propose a mix of retail, commercial and residential uses that will ensure the ongoing activation of the precinct,” Mr Draffen said.
“Mirvac will be funding and delivering over 10,000sq m of public space, including a new plaza and publicly accessible rooftop spaces as well as widened waterfront boulevard facing Darling Harbour.
“The redevelopment of Harbourside will complete the $15bn transformation of Darling Harbour and surrounding precinct, link Darling Harbour with Pyrmont and the Fish Markets, support the planned Metro station at Pyrmont and is aligned with the strategic objectives of the Pyrmont Peninsula Place Strategy. ”
-with reporting from Ben Wilmot.
This article first appeared on www.theaustralian.com.au.