Hotel sales flurry over holiday break
By Vanessa Cavasinni, editor Australian Hotelier
Numerous pub transactions have taken place in Sydney in the last two weeks.
While the Christmas/New Year period is generally downtime for hotel sales, several Sydney pubs exchanged hands right at the end of 2016. The Australian Pub Fund began divesting their pub assets, to the benefit of Oscars Hotels, and Solotel swooped on Clovelly Hotel.
Beginning the flurry, the Lalor Park Hotel in Sydney’s west sold to Lewis Hotels, with JLL Hotels & Hospitality handling the campaign. The pub has a 24-hour liquor licence and 30 gaming machines in an area that has been rezoned for medium and high density residential building, making it a solid long-term investment for the pub group.
The Australian Pub Fund began the divestment of their Riversdale Group hotels in earnest, selling three pubs over the holiday period for a combined $47 million. The main beneficiary of the assets was Oscars Hotels, who purchased the Bristol Arms Hotel near the new Barangaroo precinct in the CBD, and Como Hotel in the Sutherland Shire, for $19.5 million and $5.6 million respectively.
John Musca of JLL Hotels & Hospitality, who handled both sales, commented: "The assets demonstrated very different attributes, with Como offering a range of operating or medium-term removal and redevelopment options and Bristol representing an exceptional piece of CBD real estate with extraordinary value add and develop opportunities. We're excited to see Oscars Hotels’ next incarnation of that asset particularly. "
The APF also the Peakhurst Inn the break through Ray White Hotels and CBRE Hotels to JDA Hotels for $22.5 million. JDA Hotels had recently sold the Tennyson Hotel to Merivale at auction for a record-breaking $37.05 million.
Andrew Jolliffe of Ray White Hotels noted that the sale was indicative of current market conditions.
"The off-market sale of the Peakhurst Inn is illustrative of an experienced hotelier buying and selling in the same market; a market that is still unable to satisfy the buy-side demand for quality freehold hospitality businesses in gateway east coast cities."
One other significant sale took place just before Christmas, with Solotel expanding their presence in Sydney’s east with the addition of the Clovelly Hotel to their portfolio. The hotel was sold to Bruce Solomon’s hospitality group by Iris Capital for an undisclosed amount, again handled by Jolliffe and Daniel Dragicevich of CBRE Hotels, who noted that annual sales at the pub sit at $9.1 million.
Solotel will take over operations of the pub from February, a prospect which delights managing director Bruce Solomon.
“We are thrilled to be taking over such a well-loved pub that really is the full package – it has a brilliant location, ocean views and a great pub culture. We look forward to a great relationship with the local community, and starting to finesse the already great offering at the Clovelly.”
These transactions close what has been a record year for hotel sales in Australia. With over $800 million worth of hotels transacted nationally and in excess of half a billion of that in New South Wales alone, Musca suggested that "it's been the biggest transactional year for hotels since 2006 albeit in a far more attractive interest rate environment and with the entrance of new balance sheet representation amongst stakeholders now."