“The demand for upscale accommodation in Sydney is at an all-time high, making this investment an attractive proposition for investors,” Langsford said.

In the city, the newly developed Ace Hotel Sydney has been listed for sale through CBRE with price expectations of about $300 million.

The property is subject to a management agreement with Ace Hotel Group and is the brand’s first foray into the southern hemisphere.

Located at 47-53 Wentworth Avenue, the hotel opened in May 2022 and comprises 264 rooms and suites, a gym and conference rooms.

CBRE’s Michael Simpson and Tom Gibson are managing the sale and said, with Sydney’s CBD as Australia’s leading economic and tourism hub, its assets are both tightly held and highly sought-after investment opportunities.

“Operationally, Sydney has recorded strong growth coming out of the pandemic, with RevPAR up 13 per cent for calendar year 2023 vs 2019,” Simpson said.

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“It continues to be one of the strongest markets in Australia for 2024 with January RevPAR up 10 per cent vs January 2023, and February being one of the strongest months in Sydney’s history.”

“Despite global economic headwinds, the Australian hotel investment market has shown exceptional resilience, with 2023 recording the second-largest year in history for total transaction volume exceeding $2.3 billion, with nine deals transacting over $100 million,” Gibson said.

Sydney remains one of the tightest-held hotel investment markets in Asia Pacific, with only two hotels transacting over $100 million, including the Waldorf Astoria Sydney to Andrew and Nicola Forrest’s Tattarang, and the Sir Stamford at Circular Quay to JDH Capital for $210.5 million.

“The scale of this opportunity combined with Sydney’s booming hotel and tourism market is expected to underpin high levels of buyer interest from both domestic and international capital sources,” Mr Gibson added.

In the first sale of the year, Mark Durran, managing director, Hotel Capital Markets at Savills Australia and New Zealand, sold the 273-room Four Points by Sheraton Melbourne Docklands hotel for $96 million to global alternative asset manager, MA Financial.

Hotel trading continues to significantly recover, with headline RevPAR’s now surpassing 2019 performances and further growth expected in 2024 as inbound tourism and international flight capacity recovers, as corporate travel recovers, and as occupancies stabilise at historical averages.

The acquisition seeds MA’s new MA Accommodation Hotel fund, an open-ended fund offering the opportunity to invest in the accommodation hotel sector.

The fund will target high-quality accommodation hotel assets, similar to the 4.5-star Vibe Docklands hotel, and aim to provide investors with both a robust income stream and a compelling return profile.

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MA Financial’s Anthony O’Hea, managing director of alternative real estate investments, said hotels in Australia have seen a dramatic post-COVID recovery, with hotel revenues in line with or exceeding pre-COVID levels, despite international short-term visitor arrivals having only recovered to about 75 per cent of pre-COVID volumes.

“This combination of resilience, current asset pricing and the opportunity for further growth makes for a compelling investment proposition,” O’Hea said.

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