Invictus Developments aims for $500m of hotels with Sydney purchase

The post-pandemic revival of the travel sector has boosted the demand for new Sydney city hotels, with the former Bank of China office tower in York Street earmarked to be converted into luxury accommodation.

Singapore-based Invictus Developments, the property arm of the wealthy Indonesian Karim family, has paid $52.5 million for the 15-storey property, and will look to spend an additional $30 million to create an upmarket hotel.

The former Bank of China building will be converted into an upmarket hotel at a cost of $30 million.
The former Bank of China building will be converted into an upmarket hotel at a cost of $30 million.Credit: Mark Merton

The group last week paid $25 million for Brisbane’s 5-star the Inchcolm by Ovolo Hotel at Spring Hill, which it will add to its portfolio of the Quest Woolloongabba, and the Harbour Rocks Hotel in Sydney.

The four acquisitions represent the first stage of an expected $500 million worth of investments by Invictus Developments in hospitality assets across the east coast of Australia.

It comes as the return of corporate travel and international visitors has seen the continued improvement in performance for the Melbourne and Sydney hotel markets.

The Horwath HTL Australia Key City Hotel Market Outlook for the June 2023 quarter edition says the pace of recovery for both cities is remarkably similar regarding the volume of room night demand and room revenue.

‘Australia is seen as an exciting and vibrant destination in the Asia-Pacific region.’

Principal of Invictus Developments Chayadi Karim

However, it points out that the key difference between the two markets is the far larger volume of new supply that Melbourne needs to absorb, which is keeping occupancy recovery for Melbourne lower, impacting the pace of revenue per available room recovery.

The report is based on data from a variety of sources including the economic forecast by Deloitte Access Economics for the June 2023 quarter, and the historical hotel performance from STR as of June 2023.


Howarth HTL director Damien Little, who authored the report, says after two unconventional years when the seasonality was disrupted, “in 2023 we have seen the return of seasonal demand patterns”.

“Over the second half of 2023, the new normal regarding seasonal occupancy and the average daily rate levels will become more evident,” Little said.

The Sydney-based property investment management group, Intergen Property Group, is advising Invictus Developments on its growth strategy. The individual sale of the Inchcolm Hotel was done by Wayne Bunz and Steve Carroll of CBRE Hotels, while Mitch Noonan, James Aroney and Sophie Tieman of JLL acted on the sale of 39 York Street office building.

Chayadi Karim, principal of Invictus Developments, said the group is a “very strong believer” in the Australian hotel market as international travel is returning to pre-COVID levels and Australia is seen as an exciting and vibrant destination in the Asia-Pacific region.

“The addition of the two properties, with more planned on the east coast, adds to our current portfolio of hotels in Singapore and Japan,” Karim said.

CBRE’s Carroll said hotels continue to be an asset class of choice given the sector’s positive market fundamentals and attractive risk-adjusted returns.

“We are seeing a broad range of investors seeking growth via hotel assets, and with outbound tourism from China recovering, we forecast this growth to continue,” he said.

In Perth, which has also seen a stark rise in hotel demand, Ark Capital Partners and its investor, Kyko Group, have acquired the Seasons of Perth Hotel, which will undergo extensive renovation and rebranding to become Perth’s newest lifestyle hotel, when it reopens in 2024.

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