Shakespeare Property Group Pty Ltd (Shakespeare Property) has announced an agreement to purchase the Woolstore 1888 by Ovolo in Darling Harbour, Sydney.

The Woolstore 1888 by Ovolo is a freehold property which was converted from a wool store built in 1888 into a sophisticated hotel located in the Darling Harbour tourist precinct.

The five-level sandstone and brick building has 90 guest rooms over four floors, and a 626 square metre footprint on freehold title and was offered for sale through CBRE Hotels Michael Simpson and Wayne Bunz in 2023. 

Shakespeare Property will raise equity from wholesale investors via a single-asset, close-ended unlisted property investment trust, the Shakespeare 1888 Trusts, to fund the deal. The Shakespeare 1888 Trusts will target a 16% IRR and aim to provide an annual distribution commencing at 6%, increasing to 8% plus from the third year onwards.

Richad Saab, Vice President Hospitality Assets and Investments at Shakespeare Property Group, said the hotel, which is the fourth oldest of 21 surviving wool stores in Sydney, is a unique asset with value-add potential. “The Woolstore 1888 is a stunning hotel asset which is in great condition, in a great location, and doesn’t require major capital expenditure for us to realise its full potential.

“We think there is scope to improve the asset. But we also think this property speaks for itself, as one of Sydney’s finest heritage hotels.

“The location is also attractive with Darling Harbour poised to benefit from Mirvac’s $2 billion harbourside redevelopment, and from state government infrastructure including the Pyrmont Metro train station.”

He said the Sydney hotel market is performing strongly. “The Sydney hotel market is attractive and has shown strong recovery since Covid. Revenue per available room in Sydney has reached record levels in Sydney during 2023 and is approximately 13 per cent higher than that of 2019.

“We’re also seeing rapidly growing demand in the boutique and lifestyle accommodation market, and the Woolstore 1888 is well placed to capture this growth.”

On behalf of the vendor, Dave Baswal, CEO Ovolo Hotels said: “We are delighted to have the future of The Woolstore 1888 by Ovolo in the capable hands of The Shakespeare Property Group, having operated this property for the better part of a decade, this sale will allow us to focus on new markets across Asia Pacific with high growth opportunities aligned to the strategic direction of the greater group whilst diversifying our portfolio.”

Through a centralised back-of-house strategic hub which unlocks performance, efficiency and cost optimisation, Shakespeare Property Group owns and operates four hotels with a total 1,100 rooms, including the Pullman Cairns Hotel.

Shakespeare Property Group is part of an investment group, including Prime Value Asset Management Limited founded in 1998, and manages over $3 billion in equities, income securities, direct properties and alternative assets.

It is understood the deal was negotiated by CBRE’s Michael Simpson, Wayne Bunz and Steve Carrol.  

The Woolstore 1888 by Ovolo for sale by CBRE | The Hotel Conversation