By Clyde Mooney – editor Australian Hotelier
Recent Sydney pub sales are further indication of significantly improved investor sentiment, according to Ray White Hotels (RWH) NSW managing director, Andrew Jolliffe.
Citing a spate of recent sales in and around the Sydney CBD, Jolliffe disputes any suggestion that the industry has bottomed out or is suffering from lack of investor interest, pointing to three recent sales north of $25 million and eight sub-$10 million freehold sales in inner-city and fringe suburbs.
“The average sale yield of [these] eight hotels is approximately 8.5 per cent,” he said.
“Hence any view held that the pub market has bottomed out in this category is both at odds with the facts, and also 12-18 months out of date.”
This week has seen the pre-auction transaction of Port Kembla’s Steelworks by RWH in conjunction with Jones Lang LaSalle (JLL), and RWH’s sale of the Surry Hills KB Hotel.
Jolliffe said the activity demonstrates the “keenly sought after nature of freehold hotel assets in the national market”.
“Market sentiment is high, and this transcends all stakeholders including the key lending institutions, who have an undoubted appetite for the pub space,” he said.
The KB is destined for re-development by the purchaser.
"The hotel, without the licence and 15 poker machine entitlements, which we will now sell separately, was bought by a highly accredited developer with multiple projects in the area,” Jolliffe said.
In recent months RHW has transacted on the Charing Cross in Waverley, The Garry Owen in Rozelle and the Cat and Fiddle in Balmain.