4 August 2022, Sydney – Baring Private Equity Asia (“BPEA”), one of Asia’s largest private alternative investment firms, announced today that its affiliated real estate funds (“BPEA Real Estate”) have completed the acquisition of the Sydney Hilton hotel for A$530 million (US$370 million). The deal is the largest-ever single asset transaction in the Australian hospitality sector.
The Sydney Hilton is a landmark 587-room, 5-star hotel in the heart of Sydney’s CBD, located at 488 George Street. The hotel boasts extensive events and conferencing facilities, as well as award-winning food and beverage offerings and luxury retail outlets. The hotel has been at the heart of Sydney’s hospitality sector since being built in 1974.
Paul Gately, Head of Australia, BPEA Real Estate, commented: “We are excited to be a part of the next chapter of one of the most famous hotels in Australia. The Sydney Hilton is an iconic hotel, well-known to business and leisure travelers 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.”
Before the COVID pandemic, Australia’s tourism industry was one of the strongest in the region. As the Australian government announced various measures to support the travel and tourism industry and relaxed most COVID and travel restrictions, RevPAR levels in prime Australian hotels have most recently rebounded to pre-pandemic levels.
BPEA Real Estate is planning significant investment into the hotel, including upgrades and expansion to guestrooms and F&B outlets, enhancements to the front and back of house operations, and implementing ESG-related initiatives.
Eric Siegel, Regional Head of Hospitality, BPEA Real Estate, added: “The Australian hospitality market has rebounded much faster than many people expected. We see a lot of pent-up demand from domestic and international travelers and now have one of the prime 5-Star lodging assets in Sydney’s CBD to capitalize 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 Real Estate recently acquired a 17-storey commercial building at 235 Bourke Street in the heart of Melbourne’s CBD, valued at more than AU$200 million on a long-term lease-back. In hospitality, the fund acquired a newly built hotel in the center of Osaka located directly on the city’s prestigious Midosuji Boulevard, rebranding and launching the hotel as Japan’s first Holiday Inn Express.
The transaction was negotiated through JLL Hotels & Hospitality Group.
