Asian Pacific eyes city sites

The group behind Melbourne's hip Art Series Hotels is expected to join an expanding list of upmarket brands hoping to run hotels in two iconic Sydney CBD sandstone buildings being offloaded by the NSW government.

Asian Pacific Group chief executive Will Deague, whose company controls several five-star boutique hotels, said the sale of the historic and adjacent Education and Lands department buildings in Bridge Street offered "one of the greatest sites to come up in Sydney for a hotel".

"It's going to be hotly contested," Mr Deague said. "We're going as hard as we can."

The Art Series Hotels group is expanding its national hotel footprint. The Watson, a $108 million hotel in Adelaide with a theme based on local indigenous artist Tommy Watson, is due to open in July.

"We're looking at every capital city for the Art Series," Mr Deague said, revealing the group recently missed out on a building in Pitt Street, Sydney.

Asian Pacific's three Melbourne-based hotels, the Olsen, the Blackman and the Cullen, have provided a springboard for a nascent regional expansion which the group announced this week in launching a sub-brand of "studio" hotels.

Its boutique art-themed hotels feature original works and prints by their namesake artists in guest rooms and foyers.

Mr Deague said the floor plate and lift columns for the first 128-room Art Series studio hotel, in Bendigo, Victoria, were near completion, with the $20 million construction expected to be finished by May.

The hotel, rated four stars-plus, would bring an element of luxury now absent from regional hotel offerings, he said.

"It's going to be the first hotel I know of that will have original artwork in every room, in every corridor," he said. The fitout would include a ground-floor communal space, library and service-oriented luxury.

The hotel's rooms will be constructed using factory-built modular unitised building components from Michael Argyrou's Hickory Group, a process expected to take just 11 days to consolidate on site.

Another studio-style hotel, the Larwill will be based in Melbourne's Parkville near the Royal Children's Hospital.

Mr Deague said the group was looking to expand both the studio and Art Series concepts in NSW.

Reports suggest Asian Pacific Group will face stiff competition from other international luxury operators such as the Intercontinental Hotel Group's Indigo brand, which is expected to register interest in the Sydney government buildings.

NSW Finance and Services Minister Andrew Constance announced the buildings' sale in October, outlining a process for registrations of interest which is believed to close on December 4. An expression-of-interest campaign will start in the new year.

Interested parties have been asked to sign confidentiality agreements before being given access to the sale process for late-19th-century Renaissance revival-style structures.