Rendering of the proposed hotel (Image: Bates Smart)
Invictus Developments has lodged plans to convert an office block it acquired in central Sydney last year into a 152-key hotel, moving a step closer to reaching its goal of a A$500-million ($326 million) hospitality portfolio Down Under.
In an application to the City of Sydney, the Singapore-based developer owned by Indonesia’s Karim family submitted plans to “adaptively reuse” the 15-storey tower at 39-41 York Street as a hotel, at a cost of A$29.8 million. That investment would be in addition to the A$52.5 million it shelled out last August to acquire the property which formerly housed the Australian headquarters of Bank of China.
Invictus is taking on the office-to-hotel conversion as government statistics show that the country in January welcomed 2.1 million international tourists, its highest level in four years and up 32 percent from a year earlier.
Including the York Street project, Invictus has spent an estimated A$160 million since entering Australia’s hospitality scene in late 2022, acquiring a total of four boutique hotel projects in Sydney and Brisbane in hopes of riding a post-pandemic tourism rebound.
Reviving a Dormant Tower
The proposed hotel at the corner of York and Erskine streets would include 14 floors of rooms that could accommodate up to 320 guests, a ground-floor lobby with space for a gym as well as indoor and outdoor dining, a rooftop bar and lounge area.
Under plans by local architectural firm Bates Smart, Invictus plans to strip the building back to its concrete frame and add curved cladding to create a facade with a “welcoming hospitality venue with an engaging streetscape.”
The firm said the project will bring back to life a building that has been dormant since 2019 when the Bank of China relocated its Australian headquarters to a larger office at 140 Sussex Street, 5 minutes’ walk from its former home.
The property sits opposite Sydney’s Wynyard station, one of the busiest commuter hubs in the city, and is 300 metres from the Martin Place pedestrian mall.
Banking on a Rebound
Chayadi Karim, a principal of Invictus and son of Indonesian palm oil tycoon Bachtiar Karim, said in an August interview with Mingtiandi that the company hopes to open the planned hotel by 2025 as part of its broader goal to assemble A$500 million of hospitality assets across the country.
“We are strong believers in the Australian hotel market, as international travel continues to rise to pre-COVID levels,” Karim said in that interview.
In August last year Invictus acquired the 50-key The Inchcolm by Ovolo hotel in Brisbane’s Spring Hill suburb for A$25 million. That buy came after the company spent A$43.8 million in March 2023 to acquire the 132-key Quest Wolloongabba apartment hotel in Brisbane – located about 10 minutes’ drive from The Inchcolm, based on local media accounts.
Last year’s trio of hotel purchases followed the company’s entry to the Australian hospitality industry in December 2022 with its acquisition of the 59-room Harbour Rocks Sydney hotel for a reported A$40 million.
Bachtiar Karim and his family ranked as the 15th richest Indonesian household last year with a net worth of $3.9 billion, according to Forbes.
Record-High Room Rates
Sydney’s hospitality sector has been a magnet for wealthy Asian investors over the past year.
Well Smart Investment Holdings, controlled by Singapore-based Jack Jia, last September took over a A$500 million hotel and residential project at 372 to 382A Pitt Street in Sydney from Chinese-owned developer ICD Property and local firm Belingbak with plans to reposition the development as a solely hotel project.
In November of last year, local media accounts identified Silversea Investments, controlled by Chinese investors Frank and Wade Huang, as the buyer of Novotel Sydney Parramatta and Courtyard by Marriott Sydney-North Ryde from Singapore-listed CapitaLand Ascott Trust.
Data from STR, the hospitality market data provider arm of CoStar Group, showed hotels in Sydney achieved a record average daily rate of A$329.05 in February, up 16 percent from a year earlier as Taylor Swift’s four nights of concerts in the city raised demand. Average occupancy also rose 6 percent to 86.5 percent that month.
