Salter Brothers bring Mercure Newcastle to market

The Mercure Newcastle has been listed for sale, presenting investors with the combination of a profitable trading hotel and an approved residential redevelopment opportunity in one of Australia’s fastest-growing regional markets.

Located at 12 Steel Street, the hotel occupies a 4,414sqm freehold site at the western end of the Newcastle CBD within a precinct undergoing significant urban regeneration.

Salter Brothers, the current owner and leading global alternatives asset manager, have obtained Stage 1 development approval for a masterplan redevelopment of the site comprising 228 apartments across two towers with associated retail and car parking. 

The hotel comprises 131 recently refurbished guest rooms supported by Distrikt Press Café & Bar, seven flexible meeting and event spaces, an outdoor swimming pool and 60 on-site car parks. The hotel completed a refurbishment and rebranding to Mercure in 2024, encompassing guest rooms, meeting facilities and public areas. 

CBRE's Michael Simpson, Andrew Williams, and Nick Hill have been exclusively appointed to manage the sale through an Expressions of Interest campaign. 

Mr Simpson said, “The Mercure Newcastle is one of the most versatile hotel investment opportunities available in the Australian regional market. With vacant possession of management available from 1 January 2027, a Stage 1 development approval already secured, and a recently refurbished asset generating strong in-place cash flow, the property suits owner-operators, hotel investors, and residential developers alike. Assets of this quality, with this level of planning optionality, are rarely brought to market.”

Andrew Dunn, Salter Brothers Portfolio Director– Hotels commented, “The campaign reflected the group’s confidence in Newcastle’s long-term fundamentals and the strength of the asset. Mercure Newcastle has benefited from targeted investment, a successful repositioning under the Mercure brand and the continued evolution of Newcastle as a major regional business and lifestyle destination. With strong hotel trading fundamentals and Stage 1 approval for residential development, the property offers incoming purchasers multiple pathways to unlock value.”

Newcastle is NSW’s second-largest city and the economic centre of the Hunter Region, with a diversified economy and a growing demand base across corporate, health, education, events and leisure sectors. The city’s hotel market has delivered consistent performance, with occupancy recovering to 70.0% and average daily rate reaching $231 in the year to June 2026, representing growth of 27.6% above pre-pandemic levels. 

Mr Williams highlighted the city’s near-term infrastructure pipeline as a further demand catalyst.

“Newcastle is in the midst of a significant infrastructure investment cycle. The opening of the international terminal at Newcastle Airport in 2025, the proposed $498 million Newcastle Entertainment and Conference Centre at Broadmeadow and the $835 million John Hunter Health and Innovation Precinct are collectively broadening the city's corporate, events and visitor demand base in a way that will benefit accommodation providers over the medium to long term,” Mr Williams added.

The Mercure Newcastle is being offered for sale by Expressions of Interest closing November 5, 2026.