The stoic Crystal Palace Hotel on the southern fringe of the Sydney CBD has been sold for the first time in nearly half a century, to John Feros’ JDA Hotels.
Situated prominently on George Street opposite Central Station, the landmark pub counts a well-patronised public bar, gaming room with 27 machines, and 21 accommodation rooms. It holds a prized 3am liquor licence also permitted to trade as an early opener.
Following a competitive tender process, industry sources say the freehold going concern fetched circa $35 million.
It has been owned by highly regarded veteran Jimmy Galanakis for the past 45 years, who has mostly operated it himself bar a few years leased out, such as a spell with Keith Kelly, father to well-known publican Caroline Kelly.
Feros says he has long been interested in the property, having spoken with Kelly years ago about buying the lease.
The new owner remarks that the hotel hasn’t seen much in the way of capex in recent decades, but says Galanakis pointed out some “pretty cool things” to help the evolution. JDA plan to update and upgrade in states.
“We are very excited to add the Crystal Palace to our portfolio, and in particular so as to enjoy the synergies we believe will be able to create within a precinct we already know so well,” says Feros.
“We’ll aim to maximise the potential of the ground floor, with the public bar, a sports bar and gaming, and in the short-to medium term look at the accommodation, and a boutique hotel offering.”
The Crystal Palace, not to be mistaken for the Palace Hotel in Haymarket, is literally across the road from bustling Central Train Station, in perhaps the highest foot traffic precinct in the country. It is also close to the rapidly developing Tech Central and Central Place developments, which are forecast to usher 16K workers into around 280K sqm of new commercial space.
The George St site is endowed with ‘favourable planning approvals’, zoned SP5 Metropolitan Centre, allowing a 50-metre height limit, with 7.5:1 FSR.
JDA builds on its existing portfolio of 13 venues, spanning the eastern states, although its stronghold is the Haymarket area, where the CPH becomes its fourth asset.
Both the group’s Mountbatton and Great Southern hotels are leases, while the CPH and Charlie Chans, also on George St, are freeholds.
The group is close to submitting a DA on the heritage-listed Charlie Chans building, hoping to extend upward, and Feros suggests he may have paid in part for the Crystal’s development prospects and potential, on which he may capitalise in due course.
“Potentially we’ll add a rooftop bar, or even extend on top, but that will be down the way a bit.”
The deal was managed by HTL Property’s Dan Dragicevich and Andrew Jolliffe, who are keenly aware of its potential and desirability.
“In an increasingly consolidated market the Crystal Palace was a rare opportunity in that it had remained in the hands of a standalone single asset owner for over four decades,” says Dragicevich, “which in and of itself is a testament to not only Mr Galanakis’ stewardship, but also the intrinsic fundamentals of the property and business operations.”
“I can’t immediately recall another hotel so consistently sought after and enquired about in an acquisition sense as was the case with the Crystal Palace over the past 20 years,” adds Jolliffe.
