Following the Melbourne hotel construction boom over the last 18 months which saw six new properties open, Sydney is now the development hotspot with several projects in the design and build stage, including Barangaroo.

Lend Lease’s AUD$6 billion Barangaroo development would be the largest waterside project in Sydney since the birth of Darling Harbour over 20 years ago and would feature an iconic 250-plus room upper upscale hotel.

The hotel tower component of the development would be built on a new public pier and feature a roof-top bar, viewing platform, meeting space, restaurants, a spa, health club and swimming pool.

Lend Lease has been actively seeking prospective purchasers – both individual owners and owner-operator chains – for the AUD$250 million property and the company’s CEO of Development, David Rolls, said interest has been significant.

“Now that it has momentum and everyone knows it’s going to happen, interest has been quite high from a number of international hoteliers, as well as local,” he told HM at the 2010 Australia New Zealand Pacific Hotel Investment Conference (ANZPHIC).

Rolls said Lend Lease, which had worked on the project for five years before its tender approval by the New South Wales State Government in 2009, would not just sell the hotel to any company, but one that would be a long-term partner in the site and the city itself.

“We’re very keen on a high-end luxury hotel that also needs to suit the business and conference market,” he said. “But we want to make sure we get the right partner for the hotel, not just for the site but for what Sydney needs going forward.

Rolls said the latest design, featuring the futuristic hotel tower, was due to be lodged with the New South Wales Department of Planning in July and the latest design changes reflect the extensive consultation and detailed work undertaken over the last six months.

He also said the hotel component also goes above and beyond what was originally mandated by the government in the initial brief.

“Rather than being a mandated facility in the brief the Government put out, we thought we would bring it forward and make it a real proposition for Sydney,” Rolls said.

“The hotel is a critical part of making the western side of Sydney another face of Sydney… we have the Opera House, the Harbour Bridge, and if we simply did an office development on the Western side of Sydney, it would be just that – an office development,” he said.

The hotel tower at Barangaroo

By the time the hotel component is completed in 2014 (the entire 22-hectare project is due to be finished in 2025), it would be the second hotel over 250 rooms to be built in the city in 15 years.

Given the lack of new developments in the city, Barangaroo is the ideal opportunity for a number of international chains to get a foothold in the Sydney market and that is helping generate significant interest.

But while a number of operators have been mooted for the project – including Jumeriah, MGM, Peninsula and Mandarin Oriental – it remains to be pure speculation, given an owner must first be sought and Lend Lease is not seeking a management company for the hotel.

Also currently in the design and build stage in Sydney is the new 250-room tentatively titled ‘Hotel Switch’ at Star City, due for completion in 2011.

The first hotel over 250-rooms to open since The Westin Sydney (prior to the 2000 Olympic Games), the Star City extension is being built at a rapid pace by owners Tabcorp. While the hotel may be rising fast, intrigue still surrounds the final room-count and general features of the third accommodation tower at the Pyrmont site.

During ANZPHIC, Star City’s Managing Director Sid Vaikunta said the positioning and some features of the new boutique hotel would be different than what was originally planned.

“Currently we have 252 guest rooms and suites and that number could come down to just north of 200 as we develop some of the suite product that we have in lieu of some of the keys,” he said.

“It will have a pretty smashing pool area that is what I call ‘daytime nightlife’, so not just skinny flat whites, but cocktails and Champagne in cabanas, (while) the lobby will have a pool table, a library and a signature Japanese restaurant,” Vaikunta said, adding the hotel will have direct access to retail space and a new European spa featuring 16 treatment rooms.

The new Managing Director’s grand plans will completely reposition the property from a casino that Sydneysiders don’t want to visit to one they will want to be seen in.

“I firmly believe this is a city made up of glamour and people that like to strut their stuff and we are in the business of letting people do that,” he said.

Vaikunta said the repositioning will “create an entertainment experience”, all accessible from the new property and existing hotel and apartments.

'Switch' at Star City

Over 20 cafes, bars and restaurants are in the new plan, as well as Las Vegas-style “clubs within clubs”, something not seen in Sydney since Justin Hemmes’ tank nightclub at Establishment first opened in the early 2000s.

“The positioning of the hotel won’t just be a luxe boutique hotel, but one that has the pre-eminent suites in Sydney, if not Australia,” he said.

That’s a big call, given the calibre of suites on offer and soon to be built across the nation at hotels such as Crown Towers, Park Hyatt Sydney, InterContinental Sydney and Four Seasons.

“I think there’s an absolute market (for high-end suites) and we have an opportunity to create ‘blingy’ suites to take it to the next level,” Vaikunta said.

There’s no doubt Star City’s plans to create a new degree of hip accommodation will work in Sydney, but creating Australia’s pre-eminent suites will no doubt be a major challenge – but one the industry in the Harbour city is ready for.