Mulpha seeking partners for $200m Chinatown hotel

Renders for 355-357 Sussex Street in Sydney.

Mulpha has put a call-out to investors to partner on its $200m new hotel project in Sydney’s Chinatown, just months before construction is set to begin on the 17-storey project.

The property and hospitality company is expecting to field major interest, with hope its recent development application approval will entice opportunists to pounce to nab a slice of Sydney’s tightly-held CBD market.

The new hotel will be developed on top of a warehouse at 355 – 357 Sussex Street, which backs onto Dixon Street and the northern end of Sydney Chinatown.

The site is well-positioned to capitalise on a rise in demand from the upcoming Tech Central project – which spans six nearby suburbs including Haymarket, Surry Hills, Ultimo, Redfern, Chippendale and Eveleigh – as well as the growing number of entertainment events including concerts, major boxing matches and festivals including South by Southwest at the International Convention Centre and Hollywood screenings at IMAX in Darling Harbour.

Renders for 355-357 Sussex Street in Sydney.

Mulpha chief executive Greg Shaw said that the Sydney market was expected to deliver significant growth in hotel earnings.

“The Sydney hotel market has always been very tightly held and with development approvals hard to achieve, there is also minimal new stock expected to hit the market over the next five years,” he said. “We anticipate that Sydney hotel occupancy, room rates and profitability will experience consistently strong performance over the next decade.”

The company is in “advanced discussions” with three global hotel brands who are looking to take over the site, with Mulpha set to make a decision by the end of this month on who would lease the site.

The Sussex Street site was originally a warehouse built in 1916, and the new design would retain much of that external facade, Mr Shaw said.

“The Sydney CBD hotel market has recovered strongly, with 2023 occupancies reaching nearly 80 per cent and average rates hitting a new record over $300. This is occurring at a time when international visitor numbers are still tracking below 2019 levels, which augurs well for the future once air capacity has fully recovered,” he said.

Mulpha CEO Greg Shaw. Picture: Hollie Adams/The Australian

The news arrives as Sydney has seen construction begin on two major accommodation projects in the southern end of the CBD.

One in Sydney’s Chinatown, at 82-84 Dixon Street, has been boarded up as Singaporean developer Elegant Dixon begins its $52m 17-level development on the site the once was home to Dixon House.

That building will largely be student accommodation split across 70 per cent of the building, while the first six floors including two basement levels will comprise retail space.

Another, just 400m away in Koreatown on Pitt St, is Marriott’s eighth hotel in Sydney and the second in its Moxy collection.

That project will see one of Sydney’s tallest rooftop bars constructed above a 34-storey, 214-room hotel at 371 Pitt St.

Mulpha expects its Chinatown hotel, which will begin construction in the third quarter of this year, will be completed in 2026, around the same time Canva will complete its new Surry Hills headquarters.

Mulpha is also behind a town centre project about 35km northwest of the SydneyCBD, which it won a NSW Government tender for.

355-357 Sussex Street in Sydney.

Norwest Qaurter, which will rise beside the new Metro Station, will include three multi-level towers, an 11-storey, a 23-storey and a 25-storey tower, which will house 184 high-end apartments.

The developer’s total hospitality and tourism portfolio include InterContinental Sydney, InterContinental Sanctuary Cove Resort, InterContinental Hayman Island and Bimbadgen Winery Estate in the Hunter Valley.

It’s also behind the Swing City, a new age driving range and hospitality venue at Norwest in Sydney, which will the first in a national rollout.