Hilton Sydney will host the 2024 Hotels Have Hearts Gala dinner

Hilton’s 5-star Sydney CBD hotel has been sold to a major Asian private equity firm for AU$530 million – the largest single-asset transaction on record in the Australian hospitality sector.

Baring Private Equity Asia’s (BPEA) announced on Thursday that its affiliated real estate funds, BPEA Real Estate, acquired the 587-room Hilton Sydney at 488 George Street, with JLL Hotels and Hospitality Group negotiating the deal.

BPEA Real Estate, Head of Australia, Paul Gately, described it as a ‘great opportunity’ and expressed his confidence in the local real estate market.

“We are excited to be a part of the next chapter of one of the most famous hotels in Australia,” Gately said.

“The Sydney Hilton is an iconic hotel, well-known to business and leisure travellers alike, while its restaurants, bars, and conference facilities have played host to Sydney locals for years.

“Quality assets in prime locations like the Sydney Hilton are tightly held and don’t become available often, so it’s a great opportunity for the BPEA Real Estate team. We have a strong conviction about the long-term outlook for Australian real estate and are excited about the potential of finding similar opportunities across a variety of sectors.”

The CBD hotel, which was built in 1974, includes award-winning food and beverage venues, expansive events and conferencing facilities and luxury retail outlets.

The company intends to make significant investment in the hotel with plans to upgrade and expand guest rooms, food and beverage outlets, as well as front and back of house operations. ESG-related initiatives will also be implemented under BPEA’s ownership.  

Hilton Asia Pacific Area Vice President and Head of Australasia, Paul Hutton, described it as a strong partnership and looks forward to the two businesses working together.

“At Hilton, it is particularly important for us to find the right partners who share our vision of hospitality and our commitment to delivering exceptional experiences for guests, and our new partnership with Baring Private Equity Asia exemplifies just that,” he said.

“We look forward to working alongside them to continue the great work the Hilton Sydney team do each and every day to bring the light and warmth of Hilton hospitality to every guest experience.”

With RevPAR levels in prime Australian hotels mostly returning to pre-pandemic levels, BPEA is eager to take advantage of opportunities in this growing market.

“The Australian hospitality market has rebounded much faster than many people expected,” said BPEA Real Estate Regional Head of Hospitality, Eric Siegel.

“We see a lot of pent-up demand from domestic and international travellers and now have one of the prime 5-Star lodging assets in Sydney’s CBD to capitalise on that demand. We see a long runway for further hospitality-related investments, not just in Australia but throughout the Asia Pacific as more barriers to travel continue to fall and countries open up.”

BPEA’s other recent hospitality acquisitions include a newly built hotel in the centre of Osaka, which will be rebranded and relaunched as Japan’s first Holiday Inn Express. The firm also recently acquired a 17-storey commercial building at 235 Bourke Street in Melbourne’s CBD, valued at more than AU$200 million on a long-term lease-back.