Iris Capital continues spending spree with $56m purchase

26 June, 2019 by Craig Hawtin-Butcher

Sam Arnaout’s Iris Capital buys out ALH venue the Cambridge Tavern in Fairfield.

Iris Capital have splurged a whopping $56m on prominent gaming venue the Cambridge Tavern in Fairfield.

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The off-market sale follows hot on the heels of Iris’ well-publicised record-beating purchase of the Hotel Steyne in Sydney’s Manly from a smorgasbord of prominent investors including John Singleton and Arthur Laundy.

The Hotel Steyne sale at $62.5m earlier this year represents what is believed to be a record price for an Australian hotel. The Cambridge Tavern sale isn’t far behind at $56m.

“We’re delighted with the asset,” says Iris Capital CEO Sam Arnaout, “it’s a testimony to the expertise of JLL Hotels Director John Musca to have somehow brought this transaction together between the three parties and made the acquisition of this exceptional property possible.”

The confirmed sale by JLL Hotels & Hospitality Group was managed by their National Director John Musca. Musca negotiated with incumbent tenants the ALH group to sell their long-term leasehold interest while working simultaneously with Joe Ganim Jnr and Tony Bargwanna of Savills Brisbane to secure the privately held freehold interest.

“Analysis of the Top 100 gaming venues in NSW demonstrates the rapid consolidation of the asset class,” says Musca, “interestingly driven by experienced, private hoteliers with strong balance sheets, and leaving little scope for short-term aggregators, we’re almost at a zero supply position.”

Iris Capital acquired the Cambridge Tavern, which occupies a 5,847m2 site opposite Fairfield train station and includes large public and TAB bars, bottle shop, restaurant and 30 gaming machines.

The property has been identified as one of only 13 priority future Fairfield CBD development sites with an FSR of 3.5 to 1 and a 39m proposed height limit presenting a large-scale, mixed-use development opportunity of over 23,000m2 GFA potentially.

Musca says: “In what has rapidly become the most tightly held asset class in the country, the hotel profile appears a natural fit for the purchaser’s widely respected operating strengths and their exceptional pedigree as city centre, integrated developers and site optimisers.

“It’s an incredible site which at its core has a hotel with a long history of being a Top 10 gaming and wagering business in the state.”

In recent years Iris Capital have been particularly active in the development space with recent mixed-use projects in high density areas like Bondi Junction, the Newcastle East End city project and a proposed development on the Bourbon Hotel and former Swans Club site in Potts Point.

The Cambridge Tavern sale follows the recent acquisition of the Lidcombe Hotel by private Sydney hotel group Lesday for $54 million, purchased from Monarch Capital – a new special-purpose pub roll-up investment vehicle created by Varde Capital, previous successful foundation investors in the Redcape Hotel Group. Varde exited their interest in Redcape as part of a $677 million sale to investment bank Moelis Australia in July 2017.