First look: Billionaire Sam Arnaout reveals plans for major Narwee Hotel redevelopment
Billionaire businessman Sam Arnaout has revealed what he intends to do with Sydney's Narwee Hotel.
Nearly six years after acquiring the hotel in South West Sydney for around $45 million, Arnaout has plans now with the NSW Government to replace the long-standing pub with a 16-storey mixed-use development while retaining the hotel as part of a much larger residential and hospitality offering.
The proposal would see the existing Narwee Hotel, bottle shop and surrounding surface car park ultimately demolished and replaced by 181 apartments above a new ground-floor Narwee Hotel and two retail tenancies. The scheme, designed by Furtado Sullivan, would rise to 56 metres and include six basement levels on its 3,364 sqm corner site at 116 Penshurst Road, directly opposite Narwee Station.
But Arnaout, the founder of Iris Capital, one of Sydney's largest hotel operators, isn't planning to simply close the pub and start again.
One of the more interesting elements of the proposal is a carefully staged construction program designed to keep the Narwee Hotel trading throughout the redevelopment. The hotel itself dates back to around 1968 and has largely retained its original form, although Iris has upgraded the venue and expanded its outdoor dining facilities since acquiring it.
Initial works would begin on the southern portion of the site while the existing pub continues operating. Iris would construct the southern basement and the new ground-floor hotel and retail space first, before transferring the pub into its new premises. Only then would the existing Narwee Hotel be demolished, allowing construction to continue across the northern portion of the site.
The construction methodology shows that process unfolding progressively, beginning with demolition of the existing bottle shop and awnings, followed by the southern basement and podium, the transfer of the pub, demolition of the original hotel and then completion of the residential tower above.
The 181 apartments would comprise predominantly two-bedroom residences, with the current design report nominating 26 one-bedroom apartments, 117 two-bedroom apartments, 28 two-bedroom apartments with multipurpose rooms and 10 three-bedroom apartments. Nine apartments, representing five per cent of the project, would be allocated as affordable housing.
The proposal has progressed through the NSW Government's Housing Delivery Authority pathway and was formally declared State Significant Development in June 2025. Iris is pursuing the SSDA alongside a planning proposal that would increase the site's maximum building height from 27 metres to 56 metres.
It would be the latest example of Arnaout combining the two sides of the Iris Capital business: hospitality and property development.
Founded in 1995, Iris has grown into one of Australia's largest privately owned hospitality and development groups. Its website says the portfolio had grown to 57 venues and hotels, three vineyards and more than 5,000 luxury apartments by 2024/25.
That hospitality portfolio has also been reshaped significantly this year.
In July, Iris sold a portfolio of nine NSW hospitality assets to MA Financial-backed Redcape Hotel Group for close to $500 million, in what was reported as Australia's largest freehold going-concern hotel transaction. The deal included six Hunter venues, QT Newcastle and two Sydney hotels.
Iris Capital has been active in suburb-shaping developments both in Sydney, Newcastle, and the Gold Coast in recent years.
In Sydney it is currently delivering Queensgate, the redevelopment of five heritage buildings where Kings Cross merges into the more affluent Potts Point. Further north in Newcastle it is getting towards its final stage of its mixed-use East End precinct
In the Gold Coast the developer has the multi-billion dollar Victoria & Albert development currently under construction. Iris secured the landmark Niecon Plaza for $58.5 million in 2021 and is building two towers, with 425 apartments, above a new multi-level retail hub.
Joel Robinson
Joel Robinson is the Editor in Chief at Apartments.com.au, where he leads the editorial team and oversees the country’s most comprehensive news coverage dedicated to the off the plan property market. With more than a decade of experience in residential real estate journalism, Joel brings deep insight into Australia’s evolving development landscape.
He holds a degree in Business Management with a major in Journalism from Leeds Beckett University in the UK, and has developed a particular expertise in off the plan apartment space. Joel’s editorial lens spans the full lifecycle of a project, from site acquisition and planning approvals through to new launches, construction completions, and final sell-out, delivering trusted, buyer-focused content that supports informed decision-making across the property journey
