ALE the auction winner with four pub freeholds sold
ALE Property (ASX: LEP) last week sold the freeholds to three Queensland and one Victorian pub via auction with Burgess Rawson.
All four of the suburban hotels are leased to ALH Group until 2028, with options until 2068; and all four sold at sub five per cent yields. There was huge interest in the freehold assets, with 41 bidders registered to take part in the bidding on the lots.
The Kedron Park Hotel, 10 km north of Brisbane’s CBD, sold for $4.6 million at a yield of 4.98 per cent. The hotel is situated on a 6,008 sqm site and produces a rental net income of $229,003 + GST. Its offer includes a sports bar, gaming room, bistro and kids play area.
The Pelican Waters Tavern in Caloundra (pictured) was the most highly sought after asset of the four pubs, and sold for $10.8 million, at a an estimated annual net yield of 4.15 per cent. The Sunshine Coast pub sits on a 8,695 sqm parcel of waterfront land with a jetty/mooring lease. Its offer includes a sports bar, gaming room and separate bistro with outdoor dining deck, as well as a strong-performing BWS retail outlet. Rental net income is reported at $448,156 pa + GST.
The same purchaser of the Pelican Waters Tavern was also the successful party for The Top Pub in Morwell, Victoria, paying $3.06 million at a yield of 4.74 per cent. The regional pub is situated in the Latrobe Valley on the Old Princes Highway. The hotel sits on a massive 18,290 sqm block, and includes a 100-pax public bar, 140-pax bistro plus children’s play zone, a TAB area and gaming room. It also includes a drive-through BWS, as well as a 17-room motel offer. Rental net income sits at $145,130 pa + GST annually.
The Edinburgh Castle Hotel in Kedron did not sell immediately at auction, with bids beginning at $5.5 million and maxing out at $7 million. After a vendor bid was placed at $7.5 million, the lot was suspended so that the ALE could negotiate with the highest bidder. A few hours later it was announced that the hotel had sold for $7.5 million.
The identities of the purchasers of the four discrete lots have not been disclosed, with a Burgess Rawson spokesperson only stating they were all “sophisticated private investors buying for themselves”.
The spokesperson added: “The outcome of this auction shows that the right sort of property, handled in a professional manner, will achieve premium results.”
ALE have yet to comment on the sale of the four freeholds.
Image: Burgess Rawson