Schwartz sell-off to fund Sydney Sofitel, with helipad
MULTIMILLIONAIRE cosmetic surgeon and hotelier Jerry Schwartz is planning a controversial heliport atop the Sydney Darling Harbour Sofitel hotel he is buying from developer Lend Lease for about $368 million.
Dr Schwartz confirmed The Australian’sexclusive story that he was the buyer of the yet-to-be-built 616-room hotel while admitting that he may have to sell off more of his extensive real estate assets to fund the acquisition — the first luxury hotel developed in Sydney since the 2000 Olympics.
The 35-level hotel forms part of the $2.5 billion international convention, exhibition and entertainment precinct Lend Lease is developing at Darling Harbour.
Apart from the recent $98m sale of his Deepwater Plaza shopping centre north of Sydney to Dexus, Dr Schwartz said he was looking at selling his Sydney airport hotel, which he believes is worth up to $60m.
He said a heliport at the Sofitel was necessary to transport guests from Sydney Airport. “High-tier” guests would use the heliport, but it would also be open to the public.
The move is likely to prove highly controversial with nearby residents in Pyrmont and Ultimo.
“Such helipads are available in cities like New York and London, and it will significantly benefit Sydney’s business and convention profile,” Dr Schwartz said.
He wants to introduce external lighting to the hotel to enhance Darling Harbour at night.
The Schwartz Family Company owns 3000 hotel rooms in Australia, with 2500 in NSW including the Mercure Sydney and the Ibis King Street Wharf.
Dr Schwartz said he had been in talks with Lend Lease for about nine months to buy the hotel, which Lend Lease would develop.
It is his largest acquisition and the deal was brokered by Michael Simpson of Savills Australia.
Lend Lease had announced plans to develop a 900-plus room hotel at Darling Harbour to accommodate guests at the International Convention Centre it is developing, attracting interest from leading groups including the InterContinental Hotel chain.
But Lend Lease chief executive Steve McCann said yesterday: “When you look at developing hotels in Sydney it is very hard to get a hotel built given the cost and the room rates, which are challenging.
“Room rates in Sydney hotels have not been at the level of some of the hotels in global cities. (But) this hotel will be cost effective; they have been very careful.”
Several buyers had looked at acquiring the hotel and Lend Lease had tried to acquire as much real estate at Darling Harbour as possible,” McCann said. “We tried to buy Harbourside retail, we failed to get that.” Mirvac Group snared that centre.
Accor vice-president development, Lindsay Leeser, said the new Sofitel would not compete with other Accor brands at Darling Harbour, including the Novotel and Ibis. “The convention centre’s five-star business did not have a home. Now they do.”
Completion of the Sofitel, which will add 215,000 annual room nights to the Sydney market, is expected in 2017.
Source: The Australian - 27 August 2014
