The InterContinental Sydney Double Bay hotel has been sold for more than $215m after months of negotiations to an investor syndicate led by developer Mervyn Basserabie, alongside property figures Allen Linz and Eduard Litver.

The trio have plans for a dramatic revamp with a gross end value of up to $700m which would introduce luxury top floor apartments and retail, and seek to capitalise on the top end residential market where wealthy downsizers are selling off mansions for premiums and buying up units – particularly those offering views of Sydney Harbour.

The hotel would also continue to operate in some form.

The deal involving a significant investor syndicate came after months of behind-the-scenes talks and will result in the developers of the Pacific Bondi Beach – Mr Linz of Rebel Property Group and Mr Litver of Capit. el Group – taking on what is expected to be the next eastern suburbs landmark and bring their expertise to the project.

In a statement to The Australian, the purchasers said they would “look to reposition the property over the medium term into a world class mixed-use precinct that will enhance the rapid revitalisation of Double Bay”.

It is understood Mr Basserabie is driving the investor syndicate and the project is to be a similar shape to the Pacific Bondi Beach. A development application is yet to be lodged.

The area is already seeing a series of luxury apartment projects and has drawn in high-profile chefs like Neil Perry, who has opened two restaurants in the enclave.

The purchasers said they had “taken the view that the InterContinental Hotel is an iconic asset in the heart of thriving Double Bay”.

“Double Bay has experienced a complete renaissance in recent years and has benefited from many high quality mixed-use projects that have brought more residents and premium retail and office offerings into the Double Bay village,” they said.

They said they were excited by the opportunity to redevelop one of the largest land holdings in Double Bay, and would further enhance the Cross Street precinct.

The original deal would have resulted in a relative newcomer to the property game, United Cinemas chief executive Sam Mustaca, emerge with an interest in the project but he was not named in the latest negotiations.

Mr Basserabie has long worked with Mr Linz’s Rebel Property Group and co-developed the Pier One project in Walsh Bay with him and current owner, Bob Magid.

He is also known as an investor. In 2006, late publican Cyril Maloney struck a deal with Mr Basserabie and Mr Linz to acquire their stake in Challis House and the former Colonial Mutual Life building, both fronting the Sydney CBD’s Martin Place.

Mr Basserabie’s life story, Thinking Outside the Square, was launched in 2017, recounting his early life in Johannesburg, and his family’s move to Sydney in the 1990s.

Meanwhile, finalising the sale paves the way for the 140-room hotel dominating Double Bay’s Cross St to be converted into a luxury apartment block. The hotel was put on the market with an asking price of about $240m last year through marketing agents CBRE and Colliers, which both declined to comment. Steven Chen of The Agency introduced the buying consortium but declined to comment.

In its glory days, the once world-­famous hotel hosted celebrities such as Princess Diana. A year later, in 1997, rock star ­Michael Hutchence was found dead in one of the hotel’s suites. The hotel hosted Elton John and Madonna when it was then known as the Ritz-Carlton.

Mr Linz and Mr Litver have a strong pedigree in Sydney’s eastern suburbs with their $450m Pacific Bondi complex setting new benchmarks. Mr Linz is also developing in Sydney’s Mosman where he has just sold an apartment in his new Eden complex for more than $9.5m.

The Double Bay sale also brings to a close a dispute between the vendors, Melbourne developer Paul Fridman, and Sydney-based Bilal El-Cheikh, of Piety Group. They became embroiled in a legal dispute over their stalled efforts to redevelop the hotel having purchased it for $178m in 2021.

In 2017, the hotel was bought by Chinese multinationals for about $140m. The two buyers, Shanghai United Real Estate and Zobon Real Estate Group, were among China’s largest consortiums to forge into Australian property at time when Chinese groups were running rampant in the luxury market. But most have exited and their interest in the market faded as the last apartment boom ended.

It had bought the hotel from Singapore’s Royal Group Holdings, which ploughed about $100m into buying and refurbishing the Double Bay hotel and reopened it after it was shuttered.

The Royal Group bought the former Ritz-Carlton Hotel for almost $60m in 2013, after a controversial time when it was owned by the failed Ashington Group and, later, by Scarborough Pacific Group, which was backed by British tycoon Kevin McCabe and Victoria’s Alter family.

Source:
Real Commercial
BEN WILMOT, LISA ALLEN