CBUS Property has dumped plans for a hotel at its $480 million tower on the corner of Bourke and William streets, amid increased competition in the CBD hotel market.
Cbus Property chief executive Kevin Fitzpatrick said the company decided to devote the second tower to offices after closer examination of the hospitality market.
He said the number of hotel and serviced apartment developments in the CBD and Docklands was “putting too much pressure on the success of a four to 4 ½ -star property”.
The completed Quest Apartments at Docklands, a planned hotel at Crown Casino and the proposed Hilton Hotel at the new convention centre contributed to the decision to revert to offices. “You have to ask questions about the potential for overcapacity in that industry in that area,”
Mr Fitzpatrick said. He said the strength of the commercial property market was another factor.
“The level of inquiry in the commercial market has improved dramatically and we need to be a bit more opportunistic I suppose in looking at our solution for the site,” he said. Cbus is developing two office towers on the site bounded by Bourke, William and Little Bourke streets and Ramsay Lane.
One tower, at 550 Bourke Street, will have 25,500 sq m. The second, at 181 William Street, will have 49,500 sq m of net lettable space.
Cbus originally had a permit for the 550 Bourke Street tower to house offices and a hotel. The developer now has planning approval for the tower to be used solely for offices.
Mr Fitzpatrick said the whole development would be known and marketed as CBW, reflecting the location.
The tower at 181 William Street has been leased to insurance company CGU and lawyers Blake Dawson Waldron.
About 4500 sq m of retail space will be developed over the ground and mezzanine levels of the two buildings.
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