The iconic Sydney Westend backpackers’ hotel has been sold to local buyers with the hopes of revamping it into a hotel. The 13-storey building was sold for $19million dollars to an unnamed buyer from Victoria.
CBRE Hotels’ Rob Cross and Andrew Jackson negotiated the sale of the building, which had over 300 interested buyers for the Pitt Street property. They said the ‘phenomenal’ response was likely due to the lack of new supply of buildings in the area and the high occupancy rates of similar properties.
While the final sale went to a local, they commented that the shortlist was mostly made up of offshore buyers from countries such as China and Malaysia. This response is not surprising – as Mr Cross commented, “Strong demand levels in Sydney have produced consistently high occupancies and escalating hotel average daily rates (ADRs)”.
The building, which currently operates as a 359 bed backpackers’ hostel, is planned to be transformed into a “limited service hotel offering to take advantage of the strong Sydney hotel market fundamentals” as advised by CBRE.
Mr Cross also commented that it marks a good first quarter of the year, as “this strong trading outlook is drawing huge interest from both domestic and offshore buyers”. The trend plans to continue, especially in Sydney and Melbourne where occupancy levels and room rate growth are at an all-time high.
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