Ex-CEO cashes in as Strop's pub near Byron sells for $68m
Former Nine Entertainment boss David Gyngell and the widow of the late actor and writer John “Strop” Cornell – Delvene Cornell – have cashed in on the seemingly insatiable appetite for pubs with the sale of the Hotel Brunswick near Byron Bay for $68 million to fund manager MA Financial.
The divestment of the well-known Brunswick Heads waterfront hotel, which Mr Gyngell co-owned with Mr Cornell, is part of a $250 million collection of pubs that have changed hands in the past week.
ASX-listed Hotel Property Investments took the value of its portfolio to $1.1 billion after buying a portfolio of seven South Australian pubs for $66.1 million from the Saturno Group on a 5.4 per cent yield
Joining the action, Martin Scott, Australian boss of Swiss fund manager Partners Group, swooped on the Lucky Hotel in the Newcastle CBD for about $20 million.
Record low interest rates, the rebound in trade since the end of lockdowns, the strong cash flow nature of pub investments and their “trophy” status among high net worth investors all contributed to a record year of more than $2 billion of deals.
The sale of the Hotel Brunswick to the MA Financial Hotel Fund (MAHF) – the former Moelis Australia business – leads the sales. MAHF, which is led by Dan Brady, also manages the recently delisted Redcape Hotel Group.
The sale of the live entertainment venue was the second-biggest pub deal of the year, surpassed by the $70 million acquisition of The Vineyard Hotel in Sydney’s west by publican Andrew Lazarus.
“We have enjoyed an amazing journey with so many great people at the iconic Hotel Brunswick. Thanks to one and all,” Mr Gyngell said.
Value surge
“It’s landed in the best possible hands of Dan Brady and his team. Its growth will continue under their leadership in the best spot on the north coast of Australia.”
The sale highlights the dramatic rise in pub values in sought after locations such as the Byron Bay area, which has been the focus of a number of major hotel sales this year, including Sydney pub tzar Justin Hemmes buying the Cheeky Monkey’s backpackers bar in Byron for about $13 million in May.
John Cornell, known for his collaboration with Paul Hogan, paid $2.1 million for the pub in 1990. Mr Gyngell, who was CEO of Nine (publisher of The Australian Financial Review) until 2015, paid $5.25 million for his half-share in 2013.
HTL Property managing director Andrew Jolliffe handled the off-market sale, which was the second biggest pub deal in the greater Byron Bay area after MA Financial bought the Beach Hotel for more than $100 million in 2019, once owned by Mr Hogan and Mr Cornell.
“The Hotel Brunswick embodies everything good about the hospitality industry, and the nation’s fascination with beach culture and community,” Mr Jolliffe said.
In another big transaction, HPI continued its rapid expansion under CEO Don Smith, after buying seven pubs – four in Adelaide including The Unley and The Mile End and three in regional SA – for $66 million. All will be leased to Australian Venue Co, HPI’s main operating partner.
To partly finance the acquisitions, HPI has struck a deal to sell the large-format Acacia Ridge Hotel for $25 million to a private Brisbane investor on a yield of 4.4 per cent. HTL’s Glenn Price and Brent McCarthy acted for HPI on this deal while CBRE’s Joe Tynan assisted the purchaser.
Also getting it on the action is Mr Scott and his family, who have made their first pub investment, purchasing the Lucky Hotel from sisters Hayley Van de Stadt and Blake Nash for about $20 million.
The Lucky Hotel includes 17 gaming machines, a beer garden and 30 accommodation suites. JLL’s Kate MacDonald and John Musca negotiated the sale.
“It’s an exciting sector that’s always been of interest to me,” Mr Scott said.
“My plan is to stay in private equity [with Partners Group]. However, I will build a broader portfolio of hospitality assets with lead operators running them,” he said.
“The Lucky Hotel is an outstanding hospitality asset in the heart of the developing East End of Newcastle. Very rarely do you come across such an impeccable building restoration, inclusive of 30 ensuited rooms, with the added benefit of 17 gaming machines,” Ms MacDonald said.
