The Capitol Square Hotel in the centre of Sydney has sold for $26 million.
Gus Moors, Karen Wales, Steam Leung and Joseph Lin of Colliers sold the 94 room, mid-scale hotel, located at 3 Campbell Street in Haymarket, after a short, off-market campaign.
The three-star hotel was sold to MKH Properties on behalf of the Chandru Group, an entity associated with the renowned property investor, Mr Chandru Tolani.
Located in the heart of Haymarket, the property is ideally positioned to benefit from the new developments planned for the Central Station precinct. Despite the impacts of coronavirus, the hotel has continued to trade through this period, albeit at low occupancy levels.
“This sale represents the first hotel sale in Sydney post COVID and demonstrates continued appetite from investors to secure well located hotel assets in Sydney’s CBD,” said Gus Moors, Head of Hotels at Colliers.
Karen Wales, National Director, Hotels at Colliers said, “Despite the challenges experienced by the hotel sector, both domestic and off-shore investors continue to display optimism surrounding the markets recovery.”
New Landmark have owned property for an extended period and were initially planning to renovate, but instead elected to test the market prior to committing to the refurbishment.
“As a long-term investor in the Sydney hotel market, we continue to have great confidence in the sector’s fundamentals. The Capitol Square hotel was superfluous to our existing portfolio, and rather than upgrade it to meet the standards of our other properties, we elected to trade out at a price that met our shareholders expectations,” said Mr Sanjay Kumar.
MKH previously owned the Metro on Pitt hotel, which was compulsory acquired as part of the Sydney Metro project. As experienced owners and operators of hotels, they had been seeking a replacement property in the tightly held Sydney market.
“Following a period of low transaction volumes, we are seeing more activity for the final quarter of 2020, as both sellers and buyers start to develop greater clarity about the road to recovery for the hotel sector,” Gus Moors said.