Redcape beats the competition to The Gladstone Hotel
Redcape Hotel Group (ASX:RDC) has acquired the Gladstone Hotel in Dulwich Hill, which became available recently for the first time in 43 years.
The hotel group acquired the city-fringe pub – as well as the Little Bottler Bottleshop and Local Liquor Superstore – for $38 million, excluding transaction costs.
The assets were sold as part of an off-market select tender process by JLL Hotels & Hospitality’s senior vice president Ben McDonald and national director John Musca. Significant buyer interest was generated for one of Sydney’s most attractive pub investments, offered for the first time in 43 years. With so much interest, the sale finalised less than two weeks after bids closed.
“The result provides further evidence of the market’s ability to see past near-term volatility and pursue assets with confidence where there exists a compelling investment narrative fueled, in this case, by the dominant local trading opportunity and record low interest rates,” stated McDonald.
The unique offering included three separate businesses and liquor licences; the Gladstone Hotel, adjacent Local Liquor Super Store and the Little Bottler retail liquor outlet, all underpinned by approximately 1300 sqm of freehold commercial property and a further 800sqm of leased trading footprint.
A freehold going concern asset, The Gladstone Hotel will complement Redcape’s portfolio of suburban community hotels in high-growth areas, largely in Western Sydney, and will be accretive to distributable earnings on joining the portfolio.
“We are delighted to announce the addition of such a quality asset to our portfolio. Being our first acquisition since returning to full operation and with distributions reinstated, the purchase signifies a return to our strategy of active portfolio optimisation and growing sustainable distributions for our Securityholders over the long term,” stated Redcape CEO Dan Brady.
Vendor Craig Coote was thrilled with the results of the sale, after having decided to part with the hotel after more than four decades of ownership.
“Having made a significant decision to sell after 43 years at the hotel, we appointed JLL exclusively to manage our sale. John and Ben’s professionalism, advice and process were exceptional, and we are delighted with the outcome, in what has been an emotional experience.”
Redcape plans to significantly renovate the hotel, in line with its group focus on addressing the local community with its offer.
“Our vision is to create and nurture sociable and sustainable communities. As a Dulwich Hill fixture, The Gladstone Hotel will undergo a major refurbishment program and will be supported by Redcape’s operational platform, focused on developing hospitality professionals and driving positive social impact through our Communities program,” stated Brady.
Redcape has spent the majority of the year – since shutdown – focused on its communities program across the portfolio, which has resulted in record earnings in the last reported quarter.
“We look forward to immersing ourselves in the Dulwich Hill community and learning about the Gladstone Hotel’s customers and staff as we look to drive even better outcomes for our staff, our customers and our securityholders.”