Industry leading hoteliers Patrick and Angela Gallagher let two key assets go last week selling the Union Hotel in North Sydney for $20m and Royal Hotel in Ryde for about $37m.
The two transactions were conducted within hours of each other, with HTL Property’s Dan Dragicevich and Andrew Jolliffe brokering the Royal Hotel sale, while the Union Hotel sale was conducted by JLL’s John Musca and Ben McDonald.
The Union was sold to Sydney operators Good Beer Company who were recent vendors of the DOG Hotel in Randwick which sold to Justin Hemmes Merivale for $32.2m. Good Beer Company’s portfolio also includes the Commodore Hotel, McMahons Point and the KB Hotel, Surry Hills.
The North Sydney pub boasts two floors of trading footprint, 21 PME’s, three bars, restaurant, function rooms and large office ideal for trade conversion.
“It’s the longest held hotel in the family and we leave with feelings of ambivalence, sad to leave friends but looking forward to new ventures,” Patrick Gallagher said.
John Azar of Goodbeer Co added: “We are very excited about bringing the Union into the group and to servicing the North Sydney community, creating a special hospitality experience for locals. We thank the Gallagher family for passing custodianship of the asset to us.”
JLL said it has over $250 million of hotels currently in various stages of contract or negotiation nationally, evidencing the strongest Q1 activity witnessed for the asset class in the last 15 years.
“We are experiencing a rare conflux of compelling investment metrics, differing capital profiles and some form of latent post-COVID exigence that is driving an extraordinary level of transactional activity, in what remains a highly regulated and protected asset class,” Musca explained.
The sales come in the lead up to the highly anticipated demerger of the ALH Woolworths-owned Endeavour Drinks Group, that was postponed in March last year. The mooted IPO or possible $10 billion trade sale to potential suitors like global investment firm Carlyle Group, is expected to resolve by June. JLL said speculation is high among sector stakeholders as to the potential effect the outcome will have across the industry nationally.