Redcape returns to Wattle Grove Hotel
Redcape has acquired the Wattle Grove Hotel and Liquor Store for $25 million.
The national pub group has purchased the pub in Sydney’s west off Royal Hotels – the Malouf brothers’ business – in an off-market transaction. Redcape’s predecessor, Hedley Leisure and Gaming, had owned the pub between 2007 and 2010, before selling the pub to Royal Hotels for $8.6 million at a time when the business needed to clear some debt.
Wattle Grove Hotel, attached to a Coles-anchored shopping centre, has recently been renovated by Royal Hotels, and features a public bar, TAB, bistro, gaming room with 25 EGMs and beer garden. Included in the purchase was a separately owned bottle shop located within the shopping centre. The hotel is located in the vicinity of the new Moorebank intermodal freight terminal redevelopment, allowing for further patronage potential.
John Musca, national director of JLL Hotels & Hospitality managed the sale, stating “the blended yield of over 9 per cent reflected the unusual circumstance whereby two separate assets formed part of the transaction, a freehold going concern hotel and a separate leasehold bottle shop located in the shopping centre.”
Musca also suggested that the off-market nature of the transaction highlighted the active demand for certain types of pub assets.
“The off-market sale demonstrates that key demand generators continue to pervade, however recent commentary surrounding yield compression is driving some opinions of a plateauing market for mature assets.”
Redcape has been actively pursuing acquisitions since November, when it paid almost $100 million for two pubs in western Sydney and one in Mackay, Queensland. With Moelis Australia purchasing the Redcape business mid-2017, there has been much conjecture that the investment firm is shoring up the business for an IPO. This latest acquisition of Wattle Grove Hotel will only strengthen those suspicions.
Redcape was approached for comment, but did not respond by the time of publication.