Pontiac Land Group has been confirmed as the buyer of a long-term lease of Sydney’s Sandstone buildings (located at 23-39 Bridge Street) for redevelopment into a luxury hotel.
Singapore-based Pontiac has committed up to AUD 300 million to convert the 19th-century landmark buildings into one of Australia’s premier five-star hotels when the redevelopment is completed by 2021.
But not everyone is entirely happy. Tourism Accommodation Australia (TAA) has welcomed the development – but also called on the NSW Government to crack down on the flood of unregulated short-term accommodation it says is unfairly competing with Sydney’s hotels and could compete unfairly with the new one.
NSW Minister for Finance, Services and Property, Dominic Perrottet, said Pontiac Land would pay AUD 35 million for the lease, together with a commitment to carry out an estimated AUD 250 to AUD 300 million refurbishment of the assets, reflecting the high calibre of the bids after a competitive tender process.
“This is great news for NSW, with a 240-room luxury hotel to be built in Sydney’s tourism and financial hub, which means hundreds of new construction and hospitality jobs, and an estimated AUD 185 million boost to the NSW economy over 20 years,” Perrottet said.
TAA also welcomed the news of Pontiac’s purchase as “great news for Sydney tourism” but warned of the “unregulated short-term accommodation” threat.
TAA has the Airbnb “collaborative sharing” model in mind.
TAA chief executive, Carol Giuseppi, said the proposed new hotel was part of a wave of new hotels and serviced apartments scheduled to be added in the city over the next five years. The hotels would play a crucial role in supporting the launch next year of the new International Convention Centre.
“However, the cost of developing hotels in Sydney is extremely high and needs to be based on a sustainable use demand-led model if we are to continue to attract future investment,” she said.
“The new investment in our city is threatened by the spiralling increase in unregulated short-term accommodation – some within a few hundred metres of the sandstone buildings – which are operating contrary to strata, council and other rules.
“Investors in Sydney need to be confident that their hotel properties will be able to operate on a level playing field. It is estimated that there are over 10,000 rooms and apartments being made available for short-term rental across Sydney, many of which are operated as commercial businesses without the requisite permits. This is not good for future investors.
“These unregulated short-term commercial accommodation providers do not generally employ people, they don’t pay the appropriate council charges, there is a question about taxation, they often do not meet safety requirements and they contribute nothing to tourism promotion.
“In other words, they are not a sharing economy, they are a taking economy.
“With this exciting new project announced and other hotel developments in the pipeline we believe it is crucial that there is a review of rules and regulations to ensure future investment in the city’s tourism infrastructure is not jeopardised.”
Written by Peter Needham