Moelis completes record-breaking pub deal
Moelis Australia has now officially completed the acquisition of the Beach Hotel in Byron Bay, the most expensive pub transaction ever in Australia.
Moelis Australia paid just over $100 million for both the freehold and leasehold of the property in November last year. It is the first time that both the freehold and leasehold of the property have been under the control of one entity in 13 years.
The hotel will be operated by Moelis Australia Hotel Management (MAHM), a subsidiary of Moelis Australia. MAHM also manages the ASX 300 listed Redcape Hotel Group, comprising 32 venues along Australia’s eastern seaboard. The Beach Hotel does not sit within the Redcape portfolio.
Dan Brady, CEO of MAHM, told Australian Hotelier that the business has begun engaging with the local Byron Bay community to ensure its offering lives up to expectations.
“We’re trying to understand the values of the community, and we’ve commissioned some research to try to get a better understanding of how that translates to the pub. It’s a collaborative process whereby we’ll be seeking out members of the community, customers and staff to formulate where our investments go, going forward.”
For Brady, the real opportunity lies in bringing the leasehold and freehold back together and the efficiency that the united ownership allows – starting with maintenance and operational improvements to the base building.
“The base building has not received the required level of investment over the years due to the split ownership structure. We are well capitalised to give the property this required investment and further future investment to enhance the offer and elevate the experience for customers ensuring this iconic venue once again leads in this great community and on an international level.”
Longer term plans include a renovation of the venue. While still engaging with community leaders and receiving their input, Brady says that the process will not be dragged out, with management keen to get works under way.
“It’s not something where we’ll be sitting here for the next 2-3 years pondering, it’s about getting the investment happening and delivering a commensurate offer to the locals and also to tourists to Byron.”
At the behest of the local community, a gaming moratorium was implemented by previous freehold owners Impact Investment Group (IIG), and the continued moratorium was a condition of sale to Moelis Australia. Brady said that MAHM was comfortable with the terms, and that gaming is not something that the business is interested in at the Beach Hotel.
“Whether the gaming moratorium was in place or not, we know in this particular community gaming machines are not valued. So therefore any desire for bringing them back was not in our plans at all.”
Instead, MAHM is looking to focus on improving the F&B offer combined with a renewed focus on the hotel’s 25-room accommodation facilities.
“It’s really about building out the food-and-beverage offer. Today it has a very slim market appeal, but a more heavily invested offer could appeal to a wider market,” stated Brady.
The Beach Hotel continues to trade as normal under the new management, while plans for future refurbishments continue to be made.