The acquisition of Sydney's iconic Sheraton on the Park by China's Sunshine Insurance Group Corporation (SIG) has broken the record for the biggest hotel purchase in Australia.

JLL’s Hotels & Hospitality Group announced that the 557-room five-star hotel had been sold by US owner Starwood to Sunshine Insurance for a whopping $463 million – the largest amount paid for the acquisition of a single-asset hotel.

According to JLL, the sale is “a milestone transaction for the Australian hotel industry,” and significant of strong demand from international investors for Australian hotel assets in leading markets.

The transaction is reportedly the first real estate purchase by Sunshine Insurance in Australia, as well as the first large-scale commercial property acquisition made by a Chinese insurer in Australia since the Chinese Insurance Regulatory Commission loosened its rules governing outward bound investment.

Sheraton on the Park is considered one of coveted hotel properties in Australia, enjoying a prime location in the Sydney CBD just opposite Hyde Park, as well as affording visitors stunning views of the city skyline as well as the adjacent public parkland.

Following the purchase, the hotel will retain the Sheraton moniker and continue to be operated by Starwood as part of a long-term management agreement.

Sunshine has reportedly committed to a management agreement with Starwood of as long as 50 years under the terms of sale.

The divestment of Sheraton on the Park by Starwood is part of the asset-light strategy being pursued by the hotel operator.

“We are pleased to advance our asset-light strategy with the sale of the iconic Sheraton on the Park hotel and look forward to working closely with SIG to ensure its continued success,” said Simon Turn, Starwood global development president.

“The terms of this sale underscores the strength of the Sheraton brand and the success of the hotel, as well as the tremendous value of this property in a high barrier to entry market.”