By Ian Neubauer
ALE Property Group has said it is confident it will attract healthy prices for five metropolitan pubs it has put to market despite indications the sector has shed 30 per cent of its value since the onset of the economic slowdown last year.
Contacted today (May 20), ALE managing director Andrew Wilkinson confirmed the group was seeking buyers for the Elsternwick Hotel, the Rifle Club Hotel and the Rose, Shamrock & Thistle in Melbourne, and the Kirribilli Hotel and Pymble Hotel in Sydney – all of which are leased to Australian Leisure and Hospitality (ALH), the nation’s leading pub operator.
“It is important to make a distinction when valuing pubs. They should be divided into a number of different groups,” he said. “There are pubs that are businesses and pubs that are that are leased to major Australian corporations. In our case we own freeholds that are leased to ALH for 19 years. They have a long-term corporate cashflow streams.
“All the research we are getting shows that if you have an established hotel with long-term corporate tenant, the freehold interest in this space is continuing to trade at high levels,” he said.
Wilkinson denied the development marked a strategic turnaround for ALE, which has invested more than $33 million in pub acquisitions over the last two years.
“We have sold five pubs in the last five years. The most recent sale was the Parkway Hotel, which we sold for $8 million in July last year,” he said.
“[The recent listings] are consistent with our strategy of consistently reshaping our portfolio to get the best outcome for our shareholders [and] selling assets we believe we can get a very good price for.”
ALE is Australia’s largest listed freehold owner of pubs, with more than 100 properties across the five mainland states.
ALE shares were trading at $2.25 at 2:00pm today (May 20) compared to $2.30 seven days ago.
