South Bondi Hotel (formerly known as Noah’s Backpackers) and the recently refurbished Hotel Diplomat in Potts Point have hit the market.
South Bondi Hotel offers a significant development opportunity in a premier coastal location, just steps from Sydney’s famous Bondi Beach. With an elevated northerly outlook over one of Australia’s most recognisable locations, the former 260-bed hostel is currently being transformed into a premier mixed-use hospitality and accommodation precinct.
Set on a corner block, the irreplaceable and visually stunning site is offered with plans for 53
accommodation rooms, café retail, and multiple bar areas including a terrace with uninterrupted views across Bondi’s postcard-perfect shoreline. Located in the heart of the South Bondi hospitality precinct, the property presents a rare opportunity to meet the growing demand and chronic undersupply for quality accommodation in one of Australia’s most visited coastal locations.
Hotel Diplomat, located on Bayswater Road in Potts Point, comprises five floors of recently renovated and thoughtfully refurbished accommodation, offering 51 rooms and the potential for two ground floor retail tenancies fronting Bayswater Road. Positioned within the vibrant Kings Cross entertainment precinct, the property is surrounded by public transport, world class dining and a thriving nightlife scene.
“We’re delighted to bring two exceptional assets to market, each offering unique opportunities in Sydney’s most sought after suburbs. 2–12 Campbell Parade, Bondi, is a truly iconic beachfront property located at Sydney’s most famous beach - a rare blank canvas and the opportunity to transform the building into a landmark that defines coastal living.
“Meanwhile, The Diplomat Hotel in Potts Point is perfectly positioned to benefit from the area’s strong population growth and vibrant urban culture. It is surrounded by a thriving mix of restaurants, bars, and entertainment, presenting a compelling opportunity for investors to capitalise on one of Sydney’s most dynamic precincts,” said Matthew Meynell, Managing Director, Capital Markets & Investment Services | Australia at Colliers.
Campbell Parade - Bondi Beach
Prominently positioned on a substantial 866* square metre site, the hotel is offered with vacant
possession optionality, enabling a new owner to either run the operation or bring in an experienced hospitality operating group.
Andrew Jackson, National Director of HTL Property’s Accommodation business, advised that the hotels were available separately, or in one line. He anticipates strong interest for both properties.
“South Bondi Hotel is a rare opportunity to create an iconic and world class destination in the heart of one of the country’s most in demand entertainment precincts,” Jackson advised.
“The magical site’s enduring legacy as a world-famous hospitality business with extraordinary views out over glistening Bondi Beach, makes the site one of the city’s most exciting development opportunities to hit the market in years,” added HTL Property Director, Sam Handy.
Bayswater Rd - Potts Point
“The Hotel Diplomat is a streamlined operation, with income predominantly derived from rooms
revenue and which typically provides a more profitable operation,” added Karen Wales, Head of
Hotels, Australia at Colliers.
“The flexibility to either operate the ground floor food and beverage establishments or lease them out to experienced operators provides investors with multiple pathways to realise the value-added potential of the hotel,” added James Cowan, Head of New South Wales Investment Services at Colliers.
The Sydney CBD hotel market has rallied throughout 2025 with investor sentiment strengthened by recent major transactions. Contemporary accommodation data for Q3 2025 highlights substantial year-on-year growth in performance metrics across the key indicators of occupancy, average daily room rate (ADR) and revenue per available room (RevPAR).
This coincides with the fact Sydney’s expansive tourism base has been increasingly supported by a variety of year-round events drawing millions of visitors, - including the NRL Grand Final and British & Irish Lions tour matches, which alone generated approximately $39 million in revenue uplift to the Emerald City during the year.
“We wholly expect the stronger trading performance to be reflected in augmented investment
momentum and further growth going into 2026. The Sydney accommodation market remains one of Asia Pacific’s most sought-after hotel investment markets, historically outperforming all other Australian capital cities,” concluded HTL Property Managing Director, Andrew Jolliffe.
South Bondi Hotel (Bondi Beach) and Hotel Diplomat (Potts Point) are respectively for sale via an international Expression of Interest campaign, closing at 4pm on 8 December 2025.
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