The transaction, which is subject to regulatory approval, signifies Golden Age Group’s second foray into hotels in Melbourne’s CBD and a bold move to expand its current portfolio.

Golden Age Group purchased the L-shaped site that fronts both Little Collins and Spring Street from Grocon in February 2017 for $75 million. Redesigning the site and re-launching it as a $400 million, 39-level residential development, the project is comprised of 138 premium apartments and includes provisions for a $200 million hotel fronting Little Collins.

The proposed 26-level hotel will offer 250 hotel rooms and high-end amenities including a bar, restaurant, conference rooms and gym, and is currently slated to open in 2020.

Jeff Xu, managing director of Golden Age Group said the developer is well-versed in Melbourne’s hotel market and is confident that this world-class partnership will deliver a premium hotel offering to the Melbourne market.

“Melbourne’s hotel market has shown continued growth in rates with strong, stable occupancy and increasing demand due to Melbourne’s extensive events calendar and growth in international tourism,” said Mr Xu.

“We believe strongly in hotels as a well-performing asset class and in the continued strength of the tourism industry.”

The premium hotel will be the latest in a long line of projects for Starwood Capital and its affiliates. Since Starwood Capital Group’s inception in 1991, the firm has raised approximately $44 billion of equity capital and currently manages more than $55 billion in assets. A managing director for Starwood Capital Group in Asia, Kevin Colket said the decision to work with Golden Age Group was a combination of market confidence and the enduring reputation of the Golden Age Group brand.

“We are excited by the opportunity to enter Melbourne’s growing tourism market alongside such a successful property developer and partner as Golden Age Group,” said Mr Colket. “Melbourne's hotel market achieves almost 90% occupancy while demand continues to grow. With several new competitive hotel offerings planned for the Melbourne hotel market, we believe a hotel in this tremendous location with many park view rooms and adjacent to the vibrant city’s best retail, restaurants, and leisure offerings should perform very well.”

Golden Age Group’s investment portfolio equates to a combined value of $4.2 billion with projects spanning the Eastern seaboard. Golden Age Group recently successfully settled stage one of Melbourne’s tallest residential building, Victoria One. Two weeks ago, it launched Sydney’s most premium residences, The Harrington Collection offering an unrepeatable opportunity to live at The Rocks and will also be selling its first industrial project 85 Maddox Road in Williamstown North, Melbourne.

85 Spring Street will commence construction mid 2018 with completion expected towards the end of 2020.

Click here to view the Golden Age Group website.

Click here to view the Starwood Capital Group website.

See also:

Expansion continues for Mantra Group with new hotel opening in 2018

Melbourne property developer Steller buys former Greyhound Hotel for $7.5 million

Marina Towers Melbourne development completed months ahead of schedule