Sydney-based pub veterans the Short family is calling last drinks after 22 years, at its sprawling South West Rocks pub in regional NSW, where sales have been tracking at the same high levels as their city counterparts.
Regional and coastal pubs across the country have proved lucrative for owners and investors, with close to $200 million worth of properties changing hands in the past year.
Demand has been underpinned by the sea-changers and tree-changers who opted to move out of Sydney during the global pandemic.
The large-scale Seabreeze Beach Hotel comes with three adjoining commercial properties and approval to further develop the 3816 square metre land holding on which the asset sits.
No price has been disclosed, but similar assets have sold for between $30 million to $40 million. The Tacking Point Tavern in Port Macquarie was snapped up by pub billionaire Arthur Laundy mid last year for $47 million.
‘Despite inflationary headwinds, there still exists an unsatisfied depth of equity looking to be invested into the pub sector.’HTL Property managing director Andrew Jolliffe
Further south, private publican Peter Griffiths is selling his Tattersalls Hotel in Goulburn with a price tag of about $13 million.
Pub specialist agency HTL Property is advising on both deals, which are expected to attract attention from seasoned pub operators to investors and developers.
“Aside from being a rare and historically strong trading beachside hotel operation, the Seabreeze Beach owners have obtained development approval to substantially optimise the significant land holding it owns in the precinct,” HTL Property managing director Andrew Jolliffe said.
“Despite inflationary headwinds, there still exists an unsatisfied depth of equity looking to be invested into the pub sector.”
Occupying an imposing land holding in the heart of South West Rocks town centre, the large-format hotel comes with the usual food, beverage and gaming, plus 29 accommodation rooms.
“With the national transaction landscape seeing increased activity over the past month, interest is anticipated to
come from both NSW investors, and interstate groups and sophisticated funds,” Jolliffe said.
He said the news that Asian private equity major PAG has agreed to acquire buyout giant KKR’s controlling interest in Australian Venue Co., an operator of pubs, restaurants and event spaces, for about $1.4 billion, “should serve as a very positive talisman for the hospitality market generally”.
AVC owns and operates a portfolio of more than 210 pubs, bars and venues in metro, suburban and regional locations across Australia and New Zealand, including the Esplanade in St Kilda, Melbourne and Bungalow 8 and Cargo Bar in Sydney.
Manhattan-based KKR invested in AVC in 2017, picking up a portfolio of 50 leasehold venues and later adding further assets through a series of acquisitions.
“We’ve been very fortunate to be involved in the sale of a number of iconic coastal pub sales including The Brunswick Heads, Clovelly Hotel, Manly’s Steyne, and more recently, two in Port Macquarie – and this asset
enjoys very similar characteristics in terms of both the irreplaceable combination of beachside nature and scale,” HTL Property’s national director, Dan Dragicevich said.
The Tattersalls Hotel is considered to be the best pub in Goulburn, with the campaign tipped to attract a large mixture of local interest, buyers from surrounding regional centres and undoubtedly hoteliers from Sydney.
The current owner said his family’s recent relocation to Albury was the reason behind the sale.
“Our family has lived in Goulburn for the last 17 years but have relocated to Albury for both business and lifestyle reasons,” Griffiths said.
With annual revenues exceeding $4.45 million, the 2883 square metre hotel features a 3am liquor licence, and one of the largest trading footprints within Goulburn. It also has future mixed-use redevelopment potential, with zoning approval for commercial property.
“The Tattersalls Hotel is really well positioned for an incoming operator seeking an immediate cash flow, and with very little capital expenditure required,” Griffiths added.
HTL Property’s Blake Edwards and Sam Handy are steering the campaign, and said the Goulburn pub market has seen considerable activity and rapid consolidation over the last few years.
Edwards said that with one of the most favourable “pub to population ratios”, in regional NSW, Goulburn is seen as an attractive investment precinct.
Other recent deals include the Royal Hotel in Armidale, which was bought by the Roche group for $5 million; the Tattersalls Hotel in Casino, which pub veteran Ned Kelly bought for $9 million; and the Namoi Hotel in Narrabri, which was sold to a local private investor for $8.5 million.
Sydney-based pub tsar Justin Hemmes has identified regional Victoria as a growth sector with his $38 million purchase of the Lorne Hotel, while the popular Wye River pub was snapped up by the Di Bello family, which runs a commercial cleaning business in NSW. The family paid about $6 million for the venue last year on a sharp 4.1 per cent yield.
“The regional pub market has been comparatively sluggish over the last six months, with both an undersupply of quality hotels available, and buyers struggling to understand where fair value sits in an escalating interest rate environment,” HTL Property director Sam Handy said.
“We anticipate that the Tattersalls Hotel campaign will be an excellent bellwether for where the more positive market now sits.”
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Source: Thanks smh.com