Wollongong hotel to become psychiatric facility
The Rydges Wollongong will undergo a startling transformation from February next year when it converts from a 70-room hotel into a 90-bed private psychiatric facility.
The redevelopment of the hotel located at 112 Burelli Street follows a “complex” lease agreement being negotiated between the owner of the building, Australian Property Trust, and new tenant Evolution Health Care.
A development approval will be lodged by Australian Property Trust with Wollongong City Council within the month to undertake a $4 million refit of the Rydges Hotel property.
Evolution Health Care will lease the building on a “long-term arrangement”.
The deal was negotiated by Colliers International’s national director of transaction services – healthcare and retirement living, Phil Smith, as advisor to the Australian Property Trust.
Smith says the transaction was a long and complex negotiation, and is a great result for both parties and the broader Illawarra community, which is poorly served in terms of mental health.
The Australian Property Trust acquired the building in 2004 when it was known as the City Pacific Hotel and appointed Rydges to manage the property.
In 2005, the trust spent $3.25 million upgrading the hotel, including adding nine new rooms.
Evolution Health Care chairman and CEO Ben Thynne says Wollongong Clinic will deliver state-of-the-art private mental health services to the Illawarra region.
“Local psychiatrists have, and will continue to, be involved with the planning of the facility, which will offer vital services such as general psychiatry, depression, bi-polar and post-traumatic stress disorders,” he says.
Thynne says the clinic will add 80 jobs and 90 additional private hospital beds to the Illawarra when fully functional.
The Australian Property Trust is a subsidiary of the Melbourne-based ECS Property Group and includes the Rydges North Melbourne and Rydges Eaglehawk Resort in its property portfolio.
The expansion into the health sector is part of a move to further diversify the unlisted group. Besides its hotel assets, the trust owns residential development sites, land subdivision and commercial property.
Australian Property Trust CEO Mark Etherington says the conversion of the existing hotel to a private hospital will allow the group to improve income streams and strengthen profitability.
“We have earmarked further acquisitions that will compliment this current model of asset value-add,” he says.