Middle Eastern airline Qatar Airways is said to be looking to purchase Sydney’s Primus Hotel for close to $140m. Picture: Supplied
Middle Eastern airline Qatar Airways is showing its confidence in the Australian market by looking to purchase Sydney’s Primus Hotel for close to $140m.
The deal could become a key marker in the post coronavirus crisis market for major five star hotel properties given some smaller venues traded during the pandemic, although most of the transactions were in train before the virus struck.
If a deal is consummated it could be a guide to the market’s nadir but also open the way for further transactions as overseas investors still want to buy local hospitality assets.
Already this year, Thailand’s Savetsomphob family has picked up the new Vibe Hotel Melbourne from developer Caydon and it earlier bought the Vibe Darling Harbour Sydney.
Primus Hotel in Pitt Street is being sold by Chinese developer Greenland Group which put it on the block with a slightly higher asking price in September.
The hotel sale is viewed as a litmus test for Sydney CBD hotels, which are still being severely affected by the pandemic, prompting owners to weigh options including selling or taking on partners.
Greenland Australia managing director Sherwood Luo said the company, which developed the 172-room hotel as part of a larger project including an adjacent apartment complex that has sold out, was fielding offers when the property went on the block.
The company said the “opportunity has received a strong interest from the market, several short-listed parties are currently undertaking their due diligence”.
JLL Hotel and Hospitality’s Mark Durran is advising on the transaction and had pitched the Primus Hotel as the first major five-star Sydney hotel to be offered in many years but would not discuss the campaign.
The Chinese company is not alone in seeking to sell hotel assets. The Mirvac and NRMA Tucker Box Hotel Group joint venture is on offer at around $600m. The vendors appointed Credit Suisse and hotel broker McVay Real Estate to sell the portfolio of more than 2000 rooms after years of intense negotiations.
The joint decision to sell the entire unlisted portfolio followed the collapse of Mirvac’s plan to sell its interest in the Tucker Box Hotel Group last year.
The AccorInvest hotel portfolio is also back on the market after its buyer iProsperity Group’s Michael Gu failed to complete the transaction which was shaping as last year’s biggest hotel deal. JLL’s Peter Harper is selling the portfolio of around 23 hotels.
The sales will take into account the closure of international borders and also lower demand for business travel, particularly as Sydney’s role as a gateway city has been closed.
Qatar Airways has been active in Australia and in 2018 expanded its international hotel portfolio, buying the landmark Sheraton Melbourne for about $135m.
The airline had been chasing a berth in the Australian hotel sector for some years.
Sheraton has a long-term management agreement over the Melbourne hotel and there is speculation that the airline could look to make the Primus into a Westin hotel.
