Feros family swoops on Sydney’s Crystal Palace Hotel for $35m

Well-established families and corporate landlords are expanding their reach across the pubs sector, both through acquisition and investment in faded landmarks such as the Crystal Palace.

John Feros, director of JDA Hotels, told The Australian Financial Review that one of the family’s ideas was to turn the largely untouched property into a New York-style sports bar and bistro as well as extending its gaming room.

“We’d like to convert it into a 20- to 25-room boutique accommodation business on the upper floors, and potentially there is a scope for a rooftop food and beverage offering as well,” he said.

The Crystal Palace is in the Haymarket area, at the southern end of the CBD, where JDA Hotels runs three other pubs already. Nearby in the Tech Central precinct, Nasdaq-listed company Atlassian is building a $1 billion-plus Australian headquarters which is expected to host 4000 of its employees once the hybrid building is built.

Mr Feros said Haymarket was a good place to own a pub, given the City of Sydney’s desire to make that part of the CBD more vibrant, turning it into more of a late night entertainment area.

“We love that part of Sydney and hence why we’ve got a few venues and in that area,” he said. “We had our eye on this venue, and when it became available, we were lucky to be one of the ones that were privately tended to.”

The latest deal brings the company’s portfolio to 14 venues across New South Wales, Queensland and Victoria. The off-market transaction is managed by HTL Property.

Andrew Jolliffe, managing director of HTL Property, said the sale was an example of sophisticated investors looking for hard-yielding assets at a time when other investments were exposed to turbulence outside their control.

“We’ve seen this asset class serve as a magnet for that type of investor that wants the asset backing of hard property and robust business generation,” he told The Australian Financial Review.

“With the theme of contracting interest rates as a backdrop, the pace and volume of discussions we are having about assets like this nationally is undoubtedly quickening.”

Mr Jolliffe said it was rare for a pub  in Sydney’s CBD and metropolitan suburbs to be the only asset of a family-run company, especially for as long as the venue was held for.

“I can’t immediately recall another hotel so consistently sought after and inquired about in an acquisition sense as was the case with the Crystal Palace over the past 20 years,” he said.

Crystal Palace Hotel has 27 gaming machines with a 3am hotel licence, as well as 21 rooms for accommodation.