Redcape continues its latest buying streak, purchasing the Vauxhall Inn in Sydney’s west for over $30 million.
Off the back of its recent acquisition of the Rising Sun Hotel in Townsville, Redcape has turned its focus back on to Sydney, with the buy of the Granville gaming pub. The national group bought it off Sydney-based pub fund Bondi Asset Management.
Vauxhall Inn was the first asset purchased by the fund started by Andrew Lazarus of Eastern Hotels and business partner Stuart King. They purchased the gaming hotel in 2016 for just over $15 million, when it was ranked at number 68 in the hotel rankings and have since improved the gaming offering and revenue.
“We’ve only owned the hotel for a period of approximately two and a half years, however in that time we have concluded a material renovation, as well as moving the hotel up the NSW gaming rankings to position 47 in December 2017,” stated King.
“Redcape are clearly premium hotel operators, and consequently we wholly expect that the good momentum already created by our management team will only be further amplified under Redcape’s renowned operation.”
Location, location, location
The opportunity to purchase pubs within the Top 50 gaming rankings in high-traffic areas has become increasingly rare, as Andrew Jolliffe of Ray White Hotels, who brokered the deal, explained.
“Hotels like the Vauxhall Inn occupy footholds at major transport intersections, and are similarly positioned in respect of relativity to the epicentre of housing development growth corridors throughout Sydney and its well publicised 100,000 new resident annual expansion rate.”
“As such they are in equal parts highly sought after, hugely profitable and particularly robust in terms of revenue reliability,” suggested Jolliffe.
The 3510 sqm hotel includes a modern bar and TAB offering, as well as a gaming room with 30 EGMs. It’s also located on the corner of the Hume Highway and Parramatta Road, two of the busiest arterials in Sydney. It’s this location that made the pub an attractive asset to Redcape CEO Dan Brady.
“Situated in the suburb of Granville, at the southern gateway to Parramatta, the purchase of the Vauxhall Inn Hotel represents the addition of another real estate backed quality hotel asset to the Redcape portfolio.”
“The immediate area is currently enjoying significant investment as part of the NSW government’s Parramatta Road Corridor Urban Transformation Strategy. Having recently undergone a renovation by the vendors, the acquisition is an obvious choice given our existing presence in what continues to be a strong growth area of Sydney,” commented Brady.
While the exact sales figure has not been released, Jolliffe suggested that the Tennyson Hotel acquisition by Merivale ($37 milllion), and the Coolibah Hotel buy sale to the Vlandis Group ($40 million) are a good barometer for Vauxhall Inn’s sale price.