The former O’Sullivan’s Hotel in inner Melbourne has been listed for sale and is expected to fetch more than $3 million.
The 525-square metre pub at 914 Mount Alexander Road, Essendon, is on the market as a going concern for the first time in 20 years.
Built at the end of the building boom in 1888, the two-storey Victorian building was originally used as a butcher’s shop and home, owned by Andrew Swan, the mayor of Essendon from 1883-84.
It then traded for a long time as a local hardware store, before the introduction of large format retailers such as Bunnings forced it and many like it out of business.
The property is most widely known for its former operation as an Irish pub, O’Sullivan’s Hotel, between 1998 and 2015 by vendor Veronica O’Sullivan and her family.
The venue, on a 353-square-metre site, was then refurbished and began trading as the current Ginger Annie bar and restaurant.
Zoned Commercial 1, the asset comes with a 3am liquor licence and has the capacity for 326 patrons.
CBRE Hotels selling agents Scott Callow, who is marketing the listing as a vacant possession with Will Connolly, said interest had come predominantly from owner-operators and investors with operators in tow.
“The majority of people looking at it at the moment are looking to capitalise on the existing liquor licence and the fitout and will continue to operate as a hotel (or) hospitality venue, but possibly reposition it,” Mr Callow said.
“Outside of the major hotel operations in the area, there is probably limited competition for boutique food-and-beverage operations in that part of the world.”
Mr Callow added that freehold hotels are seeing “very strong demand”, especially those which come with the real estate.
“(Going concern pubs) are becoming harder and harder to come by because a lot of hotels over years have been broken down into businesses and freehold investments being owned separately.”
Mr Connolly said the Essendon area was changing, with a number of apartment blocks springing up in the neighbourhood.
“There is major residential development occurring in close proximity so it’s a great investment opportunity in a rapidly expanding area.”
Returns for pubs in metropolitan areas are averaging between 4.5 to 5 per cent, with yields compressing further along the eastern states, CBRE Hotels’ recent report on Australian pub trends showed.
The Essendon pub includes a front bar, rear dining room, upstairs mezzanine-style function area and front balcony.
Expressions of interest close on May 10.