Sydney is building its first five-star hotel in nearly two years at Darling Harbor with the $360-million Sydney Sofitel Darling Harbour Hotel. However, according to Accor this will not be the start of more luxury hotel development because most development sites in the city stack up better for development use.
"In Sydney of all places, its very hard to make these big, luxury hotels stack up from a highest and best-use perspective. The return is usually higher if you do something else," Michael Issenberg, chairman and COO of Accor Asia Pacific told The Australian Financial Review.
The 600 room hotel was developed by Lend Lease and will be owned by hotel investor Jerry Schwartz once completed in 2017. The hotel forms part of the $3.4-billion redevelopment of Darling Harbour's International Convention Centre complex.
The last five-star hotel to be built in the Sydney CBD was the 415-room Amora Jamison – originally called the Le Meridien Hotel – developed by Singaporean electronics manufacturer and hotel investor Eddie Foo, which opened in 1999.
Among the projects in the pipeline is the addition of 230 rooms to the Four Points by Sheraton in Darling Harbour by Singapore's M&L Group, China's Wanda Group's proposal to build a 160-room luxury hotel as part of its $1 billion mixed-use project on Alfred Street and Crown's lodged plans for its Barangaroo hotel.