Sydney, 5 February 2013- Positive sentiment is returning to the NSW pubs sector with circa $40 million in property having been sold or placed under contract via CBRE Hotels over the Christmas/New Year period and a further $30 million worth of hotels set to be offered to the market in the coming weeks.
Separate private investors have snapped up two metropolitan hotels recently in deals worth a combined total of circa $10 million.
CBRE Hotels Director Joel Fisher said a further $30 million in hotels were currently under contract in moves which were expected to inject further confidence into the recovering pubs market.
“We saw a return of confidence and increased positivity in the market at the back end of last year, which translated into a number of high profile sales” Mr Fisher said.
“Historically low interest rates and the perception that legislative risks have been watered down has enabled purchasers to make more considered and educated decisions about both their investments and current valuations.”
The next test of the market will come through a number of upcoming listings involving hotels throughout NSW.
CBRE Hotels will commence marketing four high profile properties in the coming weeks: most notably the Bristol Retro Arms in the Sydney CBD as well as The Welcome Hotel at Rozelle in Sydney, the Banjo Paterson at Jindabyne and the Swansea Hotel at Lake Macquarie.
“We have certainly noticed a shift in buyers and sellers attitudes as well as that of other stakeholders, including banks, who have a renewed appetite to lend on well-located properties with established trading histories,” Mr Fisher said.
“This is expected to aid a continued recovery in the market and underpin a pick-up in sales activity over the next 12-24 months.”
The Bristol Retro Arms is the first asset to be offered by the Redcape Property Group since last year’s recapitalistion by three off shore hedge funds, led by Goldman Sachs. A Sydney institution, the Bristol is a multi-level entertainment offering overlooking Darling Harbour which last changed hands in 2005 for $13.5 million.
The hotel represents a very rare opportunity to acquire a CBD freehold hotel, on a large 473 sqm site and an enormous floor plate of 1,200sqm+ over four levels. The hotel is being sold with eight poker machine entitlements and CBRE Hotels is expecting strong interest to acquire the property, as freehold hotel opportunities in the CBD are often sought but seldom found.
CBRE Hotels Associate Director Daniel Dragicevich said the Bristol was perfectly positioned to take advantage of the western migration of CBD office space as well as the redevelopment of Barangaroo in coming years.
Another upcoming listing is the Banjo Paterson Inn at Jindabyne, which is being offered for sale on behalf of well-known publicans Peter Harris and Gary Narvo following their recent purchase of the Lakes Hotel at The Entrance on the NSW Central Coast.
“Coming off a strong ski season, we expect considerable interest in the property, which is an iconic ski field hotel,” Mr Dragicevich said.
“The hotel offers its own microbrewery as well as a successful adjoining motel and there is future upside via a current DA for a residential redevelopment of the property.”
Another upcoming regional offering is the Swansea Hotel – an attractive and newly refurbished Lake Macquarie institution on the Pacific Highway, south of Newcastle.
Mr Dragicevich said the hotel occupied a large site of 3,235sqm which offered spectacular water views and had a diversified mix of trade via a gaming lounge, a popular bistro and beer garden, a public bar and large TAB outlet, a street front retail tenancy and first floor accommodation which was currently underutilised.
Significant interest is also expected in The Welcome Hotel – an inner west Sydney property regarded as one of the best hotels in NSW, having recently been awarded “3 schooners” and a rating of 18/20 in the SMH Good Pub Food Guide.
The Rozelle property has been jointly listed for sale through CBRE Hotels and Manenti Quinlan on behalf of corporate insolvency firm Grant Thornton.
“The hotel has a strong established trading record and offers significant upside potential, which will help underpin buyer interest,” Mr Fisher said.
“A significant draw card for purchasers will be the fact that the property is positioned to capitalise on Sydney’s increasing inner city population base, with a range of high density residential projects proposed in the surrounding suburbs,” Mr Fisher said.
Manenti Quinlan’s Gerry Quinlan said the hotel was exceptionally well presented with multiple alfresco areas and an “as new” fit out.
“The property occupies a substantial corner block that is currently under utlised,” Mr Quinlan.
“There is room to significantly expand either the beer garden or kitchen facilities and to capitalise on the under utilised first floor accommodation which could be converted to function and meeting rooms to increase the demand for the hotel as a function venue.”
The sale includes the hotel licence and 12 transferable poker machine entitlements.
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