Sydney’s pub market is proving a magnet for big investors with a Fairfax family-associated group selling two high-profile pubs in the inner city for about $94m.
Property funds manager Charter Hall and the private equity-owned Australian Venue Co. have swooped on the two iconic venues – The Clock Hotel in Surry Hills and The Bank Hotel in Newtown – that were sold by the Fairfax family’s hotel business, Amalgamated Hotels.
The pubs traded for a total of about $94m, with AVC outlaying about $32m for the leaseholds and a Charter Hall-run fund paying about $62m for the freehold interests, with ten year leases. The deal showed a crisp 5 per cent initial yield.
The sale of The Clock also set a new record as the largest-ever transaction for a food-and-beverage-focused pub in Australia at about $70m.
The deals show the continuing strength of the NSW pub market which has seen about $1.4bn worth of deals this year, defying concerns about weaker consumer spending that have hit some retailers.
The portfolio was handled by John Musca, Ben McDonald and Kate MacDonald from JLL Hotels and Hospitality Group.
The sale of the two landmark pubs, managed by Solotel, marks a significant shift in ownership after long tenures; The Clock was held for 23 years and The Bank Hotel for 14 years.
Positioned on Crown Street in Surry Hills, The Clock generates significant revenue across its bar, food, and bottle shop operations, with 10 gaming machines. The Bank Hotel has a prime location on King Street, opposite Newtown Station.
Mr Musca said the partnership between Australian Venue Co and institutional property capital was a “growing investment model in the hospitality sector, combining operational expertise with long-term real estate ownership to maximise both trading performance and asset value appreciation”.
In May, the Thomas family purchased the Regent Hotel in Kingsford – which sports 30 pokies – from the Fairfax family in a $42m deal.
Other large deals include the $500m sale of the Redcape portfolio to Iris Capital and the $70m sale of the Bexley North Hotel, along with pub king Arthur Laundy buying the Woy Woy Hotel.
Ben WilmotCommercial Property Editor