30 Jan 2024
Words Brendan Crabb Illawarra Mercury

Sale of upscale Wollongong hotel expected to fetch in high $30m range

An upscale Wollongong hotel has been listed for sale, with major operators reportedly showing interest and a sale price of well over $30 million expected.

The Grand Pacific Hotel Wollongong is a six-storey, 96-room upscale hotel currently under construction.

Financier Windlock took over the Grand Pacific Hotel Wollongong project from developer Young Street Apartments, after the mixed-use 16-storey building it was part of was handed a prohibition order by the NSW Building Commission in 2022 due to defects.

In 2022, two separatestop work orders were issued for the Wonder Apartments complex, with Building Commissioner David Chandler concerned about honeycombing and cracking in load-bearing walls.

Construction has since recommenced.

In this instance, only the hotel component of the development is listed for sale.

It's understood the majority of the 60-plus units in the complex have already sold. The apartments will sit atop the hotel component.

The financier commissioned Wollongong-based Advanced Constructions to complete the construction. The hotel features double street frontage along Young Street and Belmore Street.

ResortBrokers has been enlisted to sell Grand Pacific Hotel Wollongong.

Selling agent Trudy Crooks said the intention was always for the financier to on-sell the project.

She said given the financiers weren't going to retain the project, it would now be able to be completed to "whatever standard the end buyer wants".

Mrs Crooks said they were expecting the project to sell for a figure in the high $30 million range.

She said it was expected the hotel would be completed by the first or second quarter of 2025.

Mrs Crooks said the project had attracted several proposals from various hotel operators/management companies, including "some really high-profile buyers".

"They (the financiers) want to sell it and finish it to the quality of whoever wants to buy it; whether they want it to be four-star, four-and-a-half star, which market they want to target," she said.

"We've already received proposals from several hotel groups who are vying to operate this remarkable hotel for a savvy investor.

"Operators are eager for this top-shelf opportunity because it's unlikely we'll see a hotel of this size and calibre get off the ground in the foreseeable future.

"Climbing construction costs, ongoing supply chain challenges and rising borrowing expenses are huge barriers to entry for purpose-built accommodation assets, which is why we're seeing so few new ones across the country."

Mrs Crooks said a lease-back arrangement for the buyer was one potential option.

"We've got plenty of options, depending on if someone wants to buy it and have it as an investment, and then have one of these groups operate it," she said.

"It's going to be unbelievable... It'll have a rooftop restaurant and bar, a real game-changer."

Tim Mayoh from ResortBrokers said the Grand Pacific Hotel Wollongong will be the "epitome of the city's astonishing transformation".

"We've already seen a huge level of interest in this offering and it's easy to see why," he said. "There's simply no other hotel development like it in Wollongong."

Trudy Crooks, Managing Director
0477 882 210
trudy@resortbrokers.com.au

Tim Crooks, Director
0417 544 562
tim@resortbrokers.com.au

Tim Mayoh
Broker, Greater Sydney
tim.m@resortbrokers.com.au
0419 038 882