$70m price tag for Byron Bay’s Beach Hotel
By Vanessa Cavasinni, editor Australian Hotelier
One of Australia’s most iconic pubs has just found new ownership.
Pubs continue to be an attractive asset for investment funds, with Max Twigg selling the freehold of the Beach Hotel in Byron Bay to Impact investment Group (IIG) for $70 million. The off-market transaction was negotiated by Daniel Dragicevich and Wayne Bunz of CBRE Hotels on behalf of IIG.
Twigg had initially placed the mammoth waterfront hotel on the market a year ago, with expectations that the pub would sell for $75-80 million. The businessman had purchased the pub in 2007 for $44 million.
“There are very few landmark beachside freehold hotels like this in Australia, both in terms of scale and location. The irreplaceable oceanfront site, lease covenant, future development and reconfiguration upside and aspirational nature of the hotel provide a compelling mix for astute investors such as IIG,” stated Dragicevich.
The hotel is currently leased to John van Haandel on a 10-year lease, with a further 10-year lease option. The sale price represents a 6.3 per cent passive investment return.
Beach Hotel, situated on 4,558 sqm site, has a large coastal frontage and substantial outdoor areas. It also includes multiple bars, a bistro with an alfresco dining area, beer garden, a walk-in bottle shop, gaming room, 25 on-site hotel rooms and conference facilities, as well as a pool with heated spa.
While IIG looks for assets for that will deliver optimal returns for its investors, it has an additional mandate to pursue assets that have a social and environmental value. A spokesperson for the firm said that with the purchase of Beach Hotel, IIG hopes to implement green and social impact strategies over the next three to four years.
“We’re looking forward to settling this transaction in six months’ time. It’s a great hotel, and we’ve already made a lot of progress planning our environmental upgrades and how we’ll work with the operator and locals to deliver real positive impacts for the Byron Bay community.”
IIG told TheShout further updates would be made public when “there are more elements locked in.”