Australia’s largest pub landlord, ALE Property Group, is looking to take advantage of the red-hot pub market, putting one of its trophy assets in Queensland up for sale.
The ASX-listed group has listed the Royal Exchange Hotel in Brisbane’s riverside suburb of Toowong amid heightened demand from private investors for long-leased hotel assets.
The popular pub is on a 2453sq m site and was picked up by ALE for $5.75 million.
The hotel’s lease, with newly listed entity Endeavour Group—the third-largest gaming operator in Australia—runs until 2028 with four 10-year options in place.
Endeavour currently operates 250 Dan Murphy’s liquor stores, most of them big barn superstores, and 1392 stores under the BWS banner. It also has a portfolio of 293 hotels, with 12,300 poker machines and 290 TABs and KENO outlets.
The group is currently operating three retail bottle shop outlets and one of the state’s most recognised beer gardens and sports bar at the Toowong site.
The sale of the popular hotel is being overseen by agents Burgess Rawson and HTL Property.
HTL Property director Glenn Price said with the national market having set a record $1.5 billion in sales this financial year, investment grade opportunities with “covenants the quality of Endeavour Group” were rare.
“The Royal Exchange Hotel is a highly regarded suburban hotel operation and the stability offered by having the nation’s largest hoteliers as its listed tenants is a compelling proposition,” Price said.
The pub is expected to go for no less than $10 million given the yield contraction experienced in Brisbane’s pub market in the past six months and lack of similar investment grade stock currently available.
Pubs nationally, along with cinemas, restaurants and clubs, were forced to close from late March last year to the start of June as part of pandemic lockdowns.
Since then, almost 100 pub deals have been recorded by HTL, the majority of which were struck after October.
Major players within the sector—including Sam Arnaout’s Iris Capital, the Laundy family, listed owner-operator Redcape, Justin Hemme’s Merivale and listed investment trust Hotel Property Investments—have been very active in the market.
In March, ALE also listed four of its smaller pubs in Queensland and Victoria, all with similar leases until 2028.
The assets are the Kedron Park Hotel and Edinburgh Castle Hotel in Brisbane, the Pelican Waters Tavern in Caloundra on the Sunshine Coast and the Top Pub Hotel in Morwell in regional Victoria.
As well, The Imperial Hotel in Beenleigh, south-east of Brisbane, is being offered to the market by Brisbane’s Sun family and listed through Savills.
Article Source: www.theurbandeveloper.com