Zagames to sell entire pub and casino portfolio
The Zagame family, one of the most respected publican families in Victoria and Australia, has placed their entire pub portfolio and Vanuatu casino on the market.
The portfolio consists of six of the top-performing gaming pubs in Melbourne – Zagame’s Reservoir Hotel, Zagame’s Caulfield Club, Zagame’s Boronia Hotel, Zagame’s Ballarat Club, and Zagame’s Berwick Springs Hotel, the latter of which is ranked fourth in terms of Victoria’s gaming venues – as well as the four-star Grand Hotel & Casino in Vanuatu.
The portfolio, which is expected to sell for more than $300 million in total, is being offered individually, in any combination or in one line. CBRE Australia and Cropley Commercial have been appointed to sell the venues and are expecting significant interest both locally and internationally.
The decision to sell the high-performing pub portfolio comes six months after the death of family patriarch, Victor Zagame.
“Victor Zagame was an innovator and leader of the Australian hotel and hospitality industry with a product that immediately captured a loyal clientele at The Albion Charles Hotel more than 46 years ago (1971) for what became the Zagame Corporation – one of the Australian hotel and service industry’s most respected and well-known businesses,” stated Mark Wizel, national director of CBRE Australia.
“The successful purchaser or purchasers will have the significant advantage of buying into that success story.”
Victor Zagame Jnr, director of Zagame Corporation said the purchaser/s could be confident in the businesses that have been successful for almost half a century.
“Our venues are exceptionally well presented, our staff are leaders in the industry, and our product is second to none. These successful businesses are well placed to continue to deliver substantial growth.”
Gaming gold mine
The five freehold going-concern Victorian pubs represent one of Victoria’s most substantial EGM holdings, with 490 gaming machines which cumulatively generate $94 million of revenue on an annual basis. The Grand Hotel & Casino in Vanuatu comprises a waterfront four-star hotel with 74 accommodation rooms, and the casino that includes 16 table games, 136 EGMs and food and beverage facilities.
Placing the Zagame pubs up for sale makes this the largest gaming portfolio in Victoria to ever hit the market, at a time when there is a premium on gaming entitlements in the state.
“The State Government’s decision to extend gaming licenses until 2042 has provided operators with certainty and has made Victoria’s 13,750 pub gaming entitlements that much more sought after and valuable in Australia’s fastest growing state,” explained George Iliopulos of Cropley Commercial.
With recent State Government gaming reforms also freezing the number of poker machines in the state for the next 20 years and extending current ownership licenses from 10 to 20 years, Iliopulos also suggested that an incoming purchaser would have over two decades of certainty in regards to their share of the 490 EGMs they acquired.
Such a rare and ample offering is likely to attract varying levels of interest from national gaming groups such as ALH and Redcape, but Wizel suggests there will also be plenty of interest from international parties.
“These sites offer future mixed-use development options adding significantly to the potential upside available within a portfolio of quality and scale that very rarely comes to market.
“We are very confident of attracting a high level of interest from international buyers, particularly from Asia and North America.”