Sale of Quest hotel will test market appetite for big-ticket sites

Owners of the property that is leased to Quest hotel apartments in the heart of North Sydney are ready to test the market with the sale of the recently upgraded 100-room site which has price expectations of between $40 million to $50 million.

The property is being sold by an overseas group representing Novlan Properties and covers five floors at 223 Miller Street. It is a short walk to where the Victoria Cross metro station will be on the corner of Miller and Berry Streets and the burgeoning CBD where close to $4 billion of new construction is under way.

It comprises a recently completed apartment hotel contained in one stratum lot and set within a mixed-use hotel and residential apartment development.

Savills’ agents Nick Lower, Max Cooper and Selin Ince are advising on the sale which includes a cafe on the ground floor, 83 studios and 17 one-bedroom apartments with a conference room and other amenities.

The sale comes after the nearby Rydges hotel was sold to the Jaleel family’s High Street Holdings for $75 million from ASX-listed Event Hospitality & Entertainment in May. It is now called The Miller.

Quest has a thirteen-year lease remaining on the property under the Quest Apartment Hotels brand, one of Australia’s largest serviced apartment operators. The lease has annual fixed base rent increases with market reviews each five years plus turnover rent provisions.

Savills Australia state director NSW and Victoria Hotels, Nick Lower, said Quest North Sydney offers investors an “excellent opportunity to secure a recently developed, 4.5-star apartment hotel in the key growth market of North Sydney”.

“Opportunities like this coming to market are incredibly rare, and we expect large amounts of competitive tension throughout the campaign,” Lower said.

In a recent report on the sector, Savills said Australia’s burgeoning hotel sector continues to attract strong levels of investment despite inflationary pressures.