Singapore's Royal Group sells Australian luxury hotel for $144m

It was sold to a Chinese real estate consortium.

Royal Hotels Australia Pty Ltd, part of Singapore’s Royal Group, has sold its iconic luxury InterContinental Sydney Double Bay to Zobon Real Estate Group Co., Ltd and Shanghai United Real Estate Inc.

As China’s first Real Estate consortium that focuses on global property developments, Shanghai United Real Estate was jointly established by 10 Chinese reputable and well-known property firms, which include Zobon Real Estate Group.

The sales process that commenced in February 2017 was led by Craig Collins, JLL Hotels and Hospitality Group, and Mr Richard Abbott, Holman Fenwick Willan.

Collins said that there is an absolute shortage of quality hotels available for sale in Sydney and when one does get offered for sale, it creates great excitement among investors.

“The InterContinental Sydney Double Bay sale is the first luxury hotel to be sold in Sydney since the sale of the Westin Sydney in 2015. The Sydney hotel market is hot and in my 22 years of selling hotels I have never seen it this strong.”

He added: “The InterContinental Sydney Double Bay is a credit to Mr Asok Kumar, founder of the Royal Group of Companies, who together with two partners acquired a non-operational hotel, completely refurbishing it and repositioning the asset, creating something special. It is a first class asset in one of Sydney’s most prestigious harbourside enclaves. It is beautiful real estate.”

Peter Wilding, Managing Director for the Royal Group said: “The sale of this asset followed our strategy of recycling capital following the initial stabilisation period. Whilst we understand that the price of circa A$140m ($144m) is a record for non-CBD hotels in Australia we will miss working with all the local stakeholders in the ongoing rejuvenation of Double Bay. We are pleased with the sale and congratulated the purchasers on their acquisition of a beautiful and unique property.”

In less than two years, Shanghai United Real Estate has invested and gained direct control of five property projects in Sydney. Among these, the UDS Castle project is the jewel in the crown and includes a luxurious hotel, the international MGallery by Sofitel, and 36 levels of high-end apartments.