By James Wilkinson
Investor Dr Jerry Schwartz and operator Accor Hotels can’t confirm a luxury Sofitel hotel will be built at the new International Convention Centre in Sydney, despite continuing Australian mainstream media coverage suggesting the project is a done deal.
When contacted by HM, there was “no comment” from both parties following a third report over the past week a deal had been done with developer Lend Lease and brokered by Savills.
The AUD$350 million, 600-room luxury hotel has been the subject of intense industry and media speculation in recent months, with all reports pointing to Dr Schwartz, Australia’s largest private hotel investor, as the favourite to buy up the project.
Should Dr Schwartz take on the project, it would be a complete deviation from his investment track record to date, whereby all of his acquired properties have been existing assets, some distressed assets, and he is yet to develop a new-build hotel from the ground up.
In a recent exclusive interview with HM, Dr Schwartz said his recent acquisitions have made financial sense despite profits from hotels barely moving in the past five years.
“It is all about picking the right hotels,” he said. “Hotel RevPARs of my hotels have increased over the last few years, especially at hotels where we have upgraded the product by investing in upgrades and refurbishments.
In that interview, Dr Schwartz said picking up distressed properties and reviving them hasn’t been a risky move.
“The most ‘distressed’ of the hotels was the Fairmont [Blue Mountains Resort and Spa], and it really surprised me how such a potentially good hotel could have performed so badly,” he said.
“We invested significantly in upgrading the product, but the hotel should never have been allowed to deteriorate so badly.
“Reviving its reputation has been very satisfying and will ultimately be highly profitable,” he told HM.
More news on the International Convention Centre hotel in Sydney is expected in the coming weeks.