Regional NSW pubs remain hot property

28 May, 2020 by Vanessa Cavasinni

In a reminder that pubs remain an attractive investment, regional pub sales in New South Wales have been concluded this month to the tune of $22 million.

Some of the hotels that have been sold include the Royal Hotel in Condobolin (pictured), the Post Office Hotel in Moree, the Neath Hotel in the Hunter Valley, and the Yenda Hotel in Griffith. The four hotel sales were all handled by HTL Property’s Xavier Plunkett, and were sold to a mix of local and Sydney-based buyers.

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As regional areas have been so far less affected by the COVID-19 pandemic, investors are looking further afield at venues that will likely attract domestic tourism as restrictions ease and are buoyed by a mix of industries within the area.

“Agriculture, logistics, infrastructure and mining related industries have been particularly resolute in the face of the COVID-19 outbreak, and we feel that Regional markets that have an overweight exposure to these industries will likely respond very quickly post 1 June” stated Plunkett.

“Lower population density and fewer virus transmissions generally in the regional areas provides further optimism to the regional pubs and accommodation sectors respectively; and suggests to us the potential for some well placed positivity to the shape of the ROE model our investors are typically attracted to.”

HTL Property managing director Andrew Jolliffe said that the sales were an encouraging indication of long-term investor sentiment about hotel assets.

“From a whole of agency perspective, we’ve been buoyed by the willingness from both buy and sell-side parties to see this period as an outlier, or isolated juncture.

“Positive sentiment is being matched by positive action, and those willing to move rather than freeze in this marketplace can expect handsome financial and strategic reward over the short, medium and long term horizons.”

Greenfield sites in regional and suburban areas are also attractive acquisitions at the moment, with JLL Hotels & Hospitality announcing earlier in the month the sale of two off-market greenfield tavern sites by Lendlease to Laundy Hotels in the newly created suburbs of Jordan Springs (Penrith) and Calderwood (south of Wollongong). Laundy Hotels have already begun working on concepts for the two hotels that will become key parts of the social infrastructure of these new areas.