Hemmes bets on $1.5b Sydney CBD project

Hemmes bets on $1.5b Sydney CBD project

21 December 2018

Pub mogul Justin Hemmes has made the biggest bet of his career, buying a large Sydney CBD site adjoining his Ivy party palace for a multi-storey development valued at more than $1.5 billion, says The Australian.

The heir to the Merivale dynasty is seeking outside investors to back the billion dollar-plus project which will top out at 55 levels and include Mr Hemmes’ inaugural foray into the world of commercial office development.

The redevelopment of the George Street site, certain to rival nearby Barangaroo’s glitzy entertainment and office precincts, will also likely include hospitality outlets, an expanded Ivy nightclub, and possibly even residential apartments and hotel accommodation.

Mr Hemmes, who was awarded the Urban Taskforce Australian Property Person of the Year for 2018, said it would probably be at least a “three-year process to get approvals before we pushed the button” to start building the development.

“We will start from scratch and given Sydney’s strong demand for office space, an office tower would be a viable option, but I’ve not decided on the final outcome,” Mr Hemmes said.

A City of Sydney spokesperson told The Sydney Morning Herald that no plans for the 3,500 sqm site had yet been lodged.

The potential redevelopment comes as Sydney’s George Street is seeing a spate of new retail and commercial developments.

With the light rail getting closer to fruition, the strip will be a pedestrian zone and is tipped to attract a different style of business and retail offering.

Mr Hemmes has recently launched more than a dozen upmarket suburban pubs, transforming ageing venues into top-class restaurants and entertainment complexes.

Mr Hemmes, who controls about 70 pubs, hotels and restaurants worth $951m, evidently hopes to a spark to the city precinct that is facing stiff competition from the revamped Circular Quay, as well as the busy Barangaroo site, where James Packer’s Crown Resorts is building a $2.2bn casino, hotel and apartment complex.

His investment play is understood to be aiming to capitalise on the surging value of commercial office towers that are trading at record levels as city rents have soared, even outpacing the strong performance of the hotel sector.

Once completed, a new mixed-use development would eventually provide a longer-term income stream for Mr Hemmes as well as diversifying his holdings beyond the hospitality sector.

Sydney’s council has also been encouraging the development of new buildings that include hotels in order to attract more tourists and business travellers, with the proposed tower also a step up for the Merivale operation, potentially pitting it against international hospitality giants.