By James Wilkinson
The New South Wales Government says it plans to sell several major Sydney hotels in a new round of asset recycling to upgrade Sydney’s iconic Circular Quay wharves, however, the Government doesn’t own the assets and has come under fire from hotel chains for suggesting the buildings could be up for sale.
According to a statement released on September 28 by Premier Mike Baird and Minister for Transport Andrew Constance and Minister for Finance, Services and Property, Dominic Perrottet, the Government plans to divest some select assets currently held by the Sydney Harbour Foreshore Authority (SHFA), which have been deemed to be not of long term strategic importance.
The statement said “SHFA assets targeted for divestment will be the Shangri-La and Four Seasons hotels in the Sydney CBD, the Novotel and Mercure hotels at Darling Harbour and commercial offices at Darling Quarter”.
“There is absolutely no reason in the 21st century why the NSW Government needs to be the landlord for these luxury hotels,” Perrottet said.
Shangri-La Hotels and Resorts’ area Vice President and General Manager of Shangri-La Hotel Sydney, Michael Cottan, immediately hit back, saying the Government has got it completely wrong.
“This is a very misleading statement from the government,” Cottan said. “In effect they are talking about the land which is currently on leasehold and offering the land on freehold. The building is owned by Shangri-La Hotels and Resorts.”
Shangri-La Hotel, Sydney was sold to Hong Kong-based Shangri-La Asia group for a record at the time of AUD$352 million in June 2012, while the Four Seasons Hotel Sydney was sold by Eureka Funds Management in August 2013 to Korean firm Mirae Asset Global Investments for AUD$340 million.
Accor’s Darling Harbour Hotels, also allegedly for sale, are owned by the Abu Dhabi Investment Authority after it purchased Tourism Asset Holdings’ 31-property strong Australian asset portfolio for AUD$800 million in September 2013.
The NSW Government said AUD$200 million from the asset “sale” would be used to fund the Circular Quay wharves upgrade.