SYDNEY'S hotel sector is set for a shake-up - more than $600 million worth of assets are on the market, when occupancy rates are holding steady.

The largest portfolio, under review for possible sale, is owned by Mirvac and valued at close to $350 million.

An array of buyers have been suggested, including the US giant Blackstone and the Australian property manager Toga.

Mirvac is being advised by Moelis & Co and Investec and they are thought to be considering management deals to ensure Mirvac retains an interest in the 46 assets, which include Sea Temple, Quay West Suites, Sebel and Citigate.

Thakral Holding's sale of its $250 million Wynyard complex will include the 446-room Menzies Hotel, the Thakral House office building, the retail concourse entries to Wynyard station from George Street and a 335-bay car park.

Thakral has been battling for years with the State Rail Authority and City of Sydney to have the complex upgraded. The group has decided to sell and focus on its other operations.

The last major transactions in the sector were in mid-2010 - the sale of the Metro Hotel Sydney Central ($39.5 million) and the Sofitel Wentworth ($130 million).

There has been an absence of investment grade hotel property coming to the Sydney market over the past year and there is pent-up investor demand.

Craig Collins, of Jones Lang LaSalle Hotels, said Sydney had maintained its position as Australia's top hotel trading market, underpinned by consistent occupancy levels above 85 per cent and solid revenue per available room (RevPAR) growth.

In the year to date, RevPAR has surpassed the 2008 peak and Sydney's accommodation market has returned to the strong growth before the financial crisis.

Mr Collins said average daily rate (ADR) growth has risen to 7.1 per cent over the seven months to July 2011 to $203.68.