The New South Wales Government has announced it will fund an upgrade of Sydney’s Circular Quay by selling off several sites, including luxury hotels.
The Shangri-La and Four Seasons hotels in the city's CBD, the Novotel and Mercure hotels at Darling Harbour, and commercial offices at Darling Quarter are among the properties owned by the Sydney Harbour Foreshore Authority (SHFA) that will be put on the market.
The Government said it would raise $200 million to fund the construction of new state-of-the-art ferry wharves, with construction expected to begin in 2019.
Premier Mike Baird said the Government did not need to be the landlord for luxury hotels and the money raised would be put to good use.
"For those of us that looked at the wharves for a long time, we know that they're functional but we think they can do much, much more." Mr Baird said.
"They can provide the sort of gateway you see in global cities around the world that's attractive, that's inviting, that's vibrant."
The Government's vision for the wharves included double-storey buildings with new retail facilities.
Finance Minister Dominic Perrottet said the SHFA assets were deemed to be not of long-term strategic importance.
"There is absolutely no reason in the 21st century why the NSW Government needs to be the landlord for these luxury hotels," Mr Perrottet said.
However, Mr Perrottet refused to reveal how much ongoing revenue the state would be foregoing from lost rent.
"Some of those assets obviously bring on revenue, but we will make sure that the assets that are divested make economic sense and importantly are invested into productive infrastructure" he said.
"This is about making better use of our assets. You can't have our assets locked up and build the infrastructure of the 21st century."