This article is from the Australian Property Journal archive
PRIVATE equity interests have picked up the Allawah Hotel in Sydney’s south-west for around $30 million, as the pub market continues to roll out heady sales.
The vendors, parties associated with JDA Hotels, have sold the property after a decade of ownership whilst retaining an ownership percentage, and have entered into a management agreement with the new owners, White & Partners.
Ray White Hotels’ Andrew Jolliffe, who negotiated the off-market deal, said the sale took the form of a “hard asset changing hands, a significant equity refresh event and the implementation of a management agreement”.
“This is uncontroversially a very strong A Grade gaming hotel sale, and consequently is indicative of a transaction which required a different approach than that typically deployed,” he said.
JDA hotels founder John Feros said the private equity-style deal structure was something his group had done in the past, and would likely look to participate in again in the future where the opportunity presents.
The multi-storey hotel is 35 metres from the recently refurbished Allawah Train Station.
Jolliffe said the sale of the Allawah Hotel brings the total number of A-grade freehold hotels sold in Sydney in the past 18 months to 25.
“A-grade hospitality property typically finds itself residing upon prime commercial sites, often situated on an area’s high street, and almost invariably in close proximity to major transport and other commercial applications” he said.
“With this underwritten value fundamental in mind, and when considering the cyclically low cost of funding, we can see sound argument for the continued strength of the sector and look forward to announcing further off-market sales in the near future.”
Jolliffe has recently sold the Coolibah Hotel for 40 million, and the Tennyson Hotel, acquired by Justin Hemmes’ Merivale group for $37.05 million. He has also overseen the transactions of the Australian Pub Fund’s Kinselas, Peakhurst, Toxteth and Marlborough hotels in Sydney over the past six months for a combined $100million.
Jolliffe is marketing the large format Vic on the Park hotel in Marrickville for the Austalian Pub Fund, run by former Qantas chief executive Geoff Dixon, advertising identity John Singleton and corporate adviserMark Carnegie. It has an asking price of around $20 million.
Publican Arthur Laundy this week sold off his Bateau Bay Hotel on the state’s central coast for around $13 million, one of 19 venues in New South Wales owned and managed by Laundy Hotels.
The Premier Hotel in Newcastle has just been listed for sale via expressions of interest. It is on a 1,076 sqm site with development potential, and brings in $3.6 million of annual revenue.
CBRE is marketing the property in conjunction with Moore and Moore Real Estate on behalf of Castle Hotels, which also owns the Junction Hotel and Sunnyside Tavern.
Meanwhile, in Melbourne the Tankerville Arms Hotel in the popular inner-northern suburb of Fitzroy has hit the market with expectations of more than $20 million.
The hotel, at 230 Nicholson Street, was built in 1865 and is positioned by a 1,087 sqm site over three titles. It has a public bar, bistro and first-floor function room.
CBRE and Cropley Commercial are offering the property via on-site auction on October 5th.
Australian Property Journal
