The Australian state of New South Wales plans to sell prime state properties occupied by a series of privately operated hotels in the centre of Sydney to pay for an overhaul of the iconic Circular Quay, the city's historic wharves district.
The sale, largely welcomed by Sydneysiders as a way to spruce up Circular Quay, is expected to attract interest from across the region, particularly from Singapore investors, who are among the biggest buyers of Australia's commercial property.
The properties for sale, worth a total of about A$200 million (S$204 million), include those occupied by the Shangri-La and Four Seasons in the central business district and the Novotel and Mercure hotels at Darling Harbour.
Singaporeans last year invested more than investors from any other country in Australian commercial property, about A$4.8 billion, according to data provided to The Straits Times by Colliers International. The investment included A$2 billion on office space, A$1.5 billion on industrial property and A$743 million on hotels.
The New South Wales government wants to use the sale funds for a makeover of Circular Quay to begin by 2019, with plans for multi-storey ferry terminals and a shopping centre.
PLAN FOR VIBRANT GATEWAY
We have long looked at these wharves and thought: 'Well, that is the gateway to our city, they deserve to be vibrant, they deserve to be modern.'
STATE PREMIER MIKE BAIRD, saying the quay was the jewel of Sydney Harbour but admitted it had been neglected
The famous row of wharves, nestled in the city centre between Sydney's Harbour Bridge and Opera House, is regularly used by visitors to Sydney, particularly for ferry rides across the harbour.
State Premier Mike Baird said the quay was the jewel of Sydney Harbour but admitted it had been neglected and he wanted to "make it shine".
"(The wharves) are not something that I believe befits the greatest city in the world with the greatest harbour in the world," Mr Baird told reporters last week.
"We have long looked at these wharves and thought: 'Well, that is the gateway to our city, they deserve to be vibrant, they deserve to be modern."
The plan has largely been welcomed as an opportunity to spruce up a district of the city that is often considered drab and unappealing.
The quay was the site of the landing of the first British settlers more than 200 years ago but now houses cheap souvenir and takeaway food stores and is largely overshadowed by an above-ground roadway and a railway station.
"The biggest question about the plan so far is whether it goes far enough," said an editorial in The Sydney Morning Herald.
"We need to think big. Planning for Circular Quay should be opened up to an international design competition. When the best possible plans are on the table, we can start the conversation about costs, priorities and how to pay."
Sydney's Lord Mayor, Mrs Clover Moore, has described the project of improving Circular Quay and turning it into a "grand entry point" as one of the city's great challenges.
"At the moment Circular Quay is a congested space, made worse by the lack of clear wayfinding and visible visitor information," she said at an urban planning event in 2013.
Earlier this year, several architects called for a revamp of the site, saying it resembled "post-war Germany".
"I go to the Opera House and walk through there and you are suddenly in a very tired area," Mr Brian Zulaikha, a former president of the Australian Institute of Architects, told Fairfax Media. "Compare it to the Galleria in Milan in Italy which has dignity, meaning and is a wonderful space. We should think about doing something beautiful."
Analysts said the sale of the ground leases for the hotels would probably be of interest to the current operators of the hotels. The hotels to be sold are owned by firms in Hong Kong, South Korea and Abu Dhabi.
The national director of research at Colliers International, Ms Nerida Conisbee, said the hotel sites would be a good fit for Singaporean investors, who tend to favour "safe" assets.
"Singaporean investors do tend to concentrate on core office, safe industrial assets and hotels," she told The Straits Times.
"There is a comfort that Singaporean investors have with Australia. It is something that has built up over a very long time period."