17 October 2022

Geocon puts Garema Place luxury hotel site on market to focus on apartments

| Ian Bushnell
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Artist's impression of hotel

An artist’s impression of the proposed Canberra City luxury hotel on Bunda Street. Images: Geocon.

Development giant Geocon has pulled the plug on its $70 million luxury hotel proposal in Garema Place, listing the site for sale and readjusting its focus to the ACT apartment sector.

The JLL listing is calling it the best hotel development opportunity in the heart of Canberra’s CBD, with an approved development application for a 203-room complex underpinned by office, retail and dining offerings.

But given the demand for A-grade office space in the city, a buyer could opt to go down that route.

The 11-storey development was part of a plan to bring a string of five-star hotels to Canberra but only the Midnight in Braddon has come to fruition.

The two city hotels were to complement the historic West Block in the Parliamentary Triangle, and a fourth in the Kingston Arts Precinct, a joint venture with the ACT Government.

Geocon offloaded West Block for $20 million after purchasing the building from the federal government in 2017 for $6.25 million, and late last year the government dropped the company as its development partner in in Kingston.

But the company said it was not abandoning the hotel sector, only redirecting resources to the in-demand apartment sector.

“Our residential sales have been stronger than ever and the group is focused on expanding the residential pipeline and putting more of our group’s focus on delivering apartments,” a spokesperson said.

“The sale of the Garema Place asset will allow this.”

The spokesperson said Geocon would be expanding the pipeline of apartment projects in the ACT.

“We are not seeing any slowdown in sales and with the increase in demand and reduction in supply there will be more pressure on housing for the next few years unless groups like Geocon focus on delivering more to the market to meet the housing demand,” the spokesperson said.

The company still saw rising demand for hotels in the post-Covid era and it would focus on expanding its Abode brand.

Artist's impression of hotel

A Garema Place view of the proposal, showing the dining precinct and new Gus’s Cafe.

The 11-storey building was to rise on the 1503-square-metre site at 70 Bunda St and 47 Garema Place, with three basement levels of parking with 91 spaces and 3071 sqm of premium office space.

Features included a rooftop pool and bar, restaurants and cafes on the ground floor, a ballroom, and a high-end commercial office and meeting space.

The DA was finally approved at the beginning of 2020 but that was the worst possible time for a hotel development with the COVID-19 pandemic about to hit and wipe out domestic and international travel.

Coming out the other side of the pandemic, travel is still to recover fully and the construction industry is beset by cost blowouts, delays and labour shortages.

The final approved design from Fender Katsalidis Architecture was the hotel’s fourth iteration. It began as a 16-storey, 233-room hotel but was scaled back amid concerns about overshadowing.

There were also concerns about insufficient parking, with the original proposal containing only 24 spaces.

The jewel in the dining precinct was to be new Gus’s Cafe, with Geocon saying it would maintain and honour the heritage of the site.

One of the many conditions attached to the approval required Geocon to install an artwork or mural telling the story of the cafe and reinstalling a plaque.

Other, more significant conditions included changes to the plans for the upper floors to reduce overshadowing, allowances for tree growth, bicycle parking on the ground floor, more street parking, and a Noise Management Plan.

Geocon said at the time the hotel would bring an “unrivalled level of style and glamour to Canberra’s city centre, while still maintaining the character and charm of old Canberra”.

Geocon bought the Garema Centre building at 70 Bunda Street (Block 5, Section 47) in September 2017 for $13.35 million. It then acquired Block 1, Section 47 and consolidated the two.

Comment was sought from Geocon.

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