Singapore’s Royal Group makes foray into Sydney
Renovation at the Intercontinental Double Bay - source: supplied
BEFORE the paint is dry, the brass polished and the opulent grey marble floors fully restored, the new owners of Sydney’s Intercontinental Hotel Double Bay are already scouring Sydney for more hotels.
Singapore’s Royal Group (previously Royal Brothers Group) has ploughed about $100 million in acquisition costs into the 140-room hotel in Cross Street ahead of the much-anticipated opening in mid-November.
Replete with a $5000-a-night royal suite and a Los Angeles-style rooftop garden, the hotel is already reinvigorating Double Bay, adding glamour to the village-like suburb and providing much-needed confidence for its long-suffering retailers.
Royal has a portfolio of about $1 billion worth of hotels in Southeast Asia, with four properties in Singapore — including the just opened Sofitel So Singapore in Robinson Road with interiors by Karl Lagerfeld — and is scouring Sydney for more acquisitions.
“We are planning to develop more hotels in Australia,” said Peter Wilding, the Singapore-based managing director of Royal Hotels Australia. “We are looking at a few other opportunities in Sydney.”
Mr Wilding, previously boss of Lend Lease in Asia and a former director of an Abu Dhabi government sovereign wealth fund, Mubadala, is upbeat about Royal’s aggressive plans for Australia — particularly Sydney.
“We are attracted by Sydney’s high hotel occupancies, but also the opportunity for (room) rate growth,” he said.
Internationally, Royal Hotels, part of the Royal Group which was founded in Singapore in 1947, is looking to reposition Sydney office blocks and existing buildings into hotels rather than having new hotels built.
“It could be a conversion or a refurbishment of an existing hotel, our strategy is to be in the market within 18 months of acquisition,” Mr Wilding said.
But Royal Hotels will not touch the two historic sandstone buildings in the heart of Sydney’s CBD which the NSW government is trying to sell for conversion into a grand hotel — deeming the project too difficult, given urban planning constraints.
“We have looked at them but we are not pursuing it,” Mr Wilding said.
“But in hospitality you do need to have diversification, we will pick gaps in various markets, and that is why Double Bay was attractive, we felt that luxury for Double Bay was imperative, and we felt the Sydney market had lost some focus on that sector.”
Mr Wilding said it was unlikely the group would look for budget hotel opportunities, saying it was too difficult to get high room rates.
Apart from Australia — where the Royal Group controlled a significant hotel portfolio about 15 years ago — the company is looking at the Maldives and various parts of Bali, but not Lombok, for more acquisitions.
Source: The Australian - 2nd October 2014
