The Southern end of the Sydney CBD remains in the spotlight as the NSW Government’s $3.4 billion commitment to build exciting new infrastructure and transport hubs takes shape, including the Darling Harbour Line, Town Hall Metro Line, and the new Light Rail.
In excess of AUD $97.3 billion has been committed overall to NSW infrastructure investment over the next four years alone, including projects such as Metro City and Southwest, North and West Connex, amongst numerous other projects, currently underway.
And, despite the current global pandemic, public and private corporations are undertaking infrastructure developments of unprecedented parallels, such as Atlassian’s $1 billion headquarters next to Central Station and the $2.5 billion Central Place Sydney project, a twin tower development by Dexus and Frasers Property Australia.
At the centre of this transport transformation is Australia’s largest railway station, Central Station which is attracting international attention and shining a light on the evolving suburb of Ultimo, which is due to see one of just five freehold island sites in the precinct set to hit the market with a guide price north of $100 million.
For sale through Andy Hu, Jordan Lee, Stuart Cox and Nick Lower of Savills Australia on behalf of Aarons On Ultimo Pty Ltd, 37 Ultimo Road, Haymarket comprises The Ultimo Hotel, a 4 star rated, boutique hotel comprising 95 guest rooms together with 10 retail tenancies comprising a single large basement level tenancy plus nine high exposure ground level retail tenancies.
The property sits on a 1,584sq m* site and offers further upside through redevelopment or repositioning under the existing development controls applicable to the site. The building was converted to the current hotel and retail/commercial uses in 1988 and subsequently extensively renovated with circa $10 million in refurbished costs undertaken in 2016.
The Ultimo Hotel is currently operated by the Rydges Hotel Limited under a Hotel Management Agreement, according to Andy Hu, Joint State Head, Asia Markets at Savills Australia, “The agreement commenced on 29 October 2018 for a term of five (5) years, however termination without cause provision can be invoked 18 months from the commencement date.”
“Candidates have the option of continuing management with Rydges Hotels Limited or vacant possession” he continued.
The site offers 1,781sq m* of prime retail space with tenants including NAB, 7 -Eleven, the popular Karaoke bar, D1 Karaoke Sydney (650sqm* basement tenancy), Bancho Bar, No.1 Malatown and Dodee Paidang.
With a 50 metre maximum height limit, a 10% additional increase in either height or FSR may be achieved subject to council approval (STCA) allowing for circa 10,362sq m of GFA in total (STCA).
According to Stuart Cox, Director, Residential Site Sales at Savills Australia, “The chance of one of these island sites coming to market is extremely rare in Sydney, especially in the Southern CBD, and offers not only a redevelopment or repositioning of The Ultimo Hotel; but the ability to provide an additional 13 storeys above what is already present (STCA), in addition to releasing the retail tenancies as expiries arise or strata subdivide the retail space and sell off individually.”
Jordan Lee, Joint State Head, Asia Markets at Savills Australia believes local investors and developers are being just as aggressive as their offshore counterparts for these types of assets as the Sydney market is so supply stricken for quality assets.
“Over the years, The Ultimo Hotel has garnered a lot of interest in the mid-tier market with domestic and international investors and we are confident even during the pandemic that there will be further local and offshore interest, as the opportunity to acquire prestigious sites such as this are not readily available.
“Acquiring a pure island development site of this scale is rarely seen in Sydney, let alone Australia” said Mr Lee.
Directly opposite Market City, The Ultimo is within close proximity to neighbouring landmarks, including Darling Harbour precinct, Capitol Theatre , International Convention Centre Sydney and World Square. In addition, the property is positioned within an educational precinct, including leading institutions such as University of Technology Sydney, TAFE NSW, Notre Dame and Sydney University.
The property is well serviced by public transport with Central and Town Hall Train Stations located within walking distance. The recently opened Haymarket light rail stop at the main entry to Paddy’s Market is located 300 metres from the site.
According to Nick Lower, State Director - NSW, Metro & Regional Sales at Savills Australia, the southern end of the Sydney CBD is well established with surrounding developments including a mixture of heritage style commercial buildings with ground floor retail and accommodation, inter-mixed with modern mixed-use residential apartment and accommodation developments.
“Public transport is currently available in the form of rail, light rail and bus services which all connect to Sydney’s Central Railway Station, which is located approximately 150 metres from the site.”
Mr Lower went on to say that The Ultimo also benefits from the new Light Rail project which commenced in December 2019 and provides access between the southern end of the CBD from Central Station through to Circular Quay and also to the eastern suburbs terminating at Kingsford and Randwick.
The property is offered for sale via an International Expressions of Interest campaign closing 2pm Thursday, 24 September 2020.
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