Irish pub sells for $31m amid pandemic buying spree
Listed pub owner and operator Redcape Hotel Group has extended its post-COVID buying spree, after snapping up O’Donoghue’s Hotel in Penrith for $31 million amid a flood of new deals in the fast-recovering sector.
Alongside the acquisition of the large-format Irish-themed pub – the group’s fourth purchase since November – Redcape said it expected earnings for the six months to December 2020 to be ahead of what it delivered in the prior half-year period despite higher compliance costs due to the pandemic, and declared an interim distribution of 1.83 cents per security.
Redcape CEO Dan Brady said the group had delivered a “phenomenal performance” coming out of the crisis with “solid revenue growth” since returning to full operations in July.
O’Donoghue’s Hotel, which lifts the value of Redcape’s NSW and Queensland portfolio to about $1.2 billion, sits on an 8000 square metre site opposite Emu Plains train station and includes a restaurant, beer garden and bottle shop.
It was offered for sale by the Falcone family’s FAL Hotels, which had owned O’Donoghue’s for more than 23 years.
In November, Redcape bought the Gladstone Hotel in Dulwich Hill in Sydney’s inner west for $38 million and followed that up with two acquisitions in Brisbane – the Shafston and Aspley Hotels – for a combined $27.5 million.
Selling agents John Musca and Ben McDonald from JLL said the sales campaign for O’Donoghue’s drew out the who’s who of the local hotelier set, along with commercial property developers, given the site includes 5500 sq m of under-used land.
Mr McDonald said hotels occupying a dominant trading footprint in fast growing geographical locations were highly sought-after by hotel operators and investors.
Alongside this acquisition – Redcape’s fourth since November – Woolworth’s-backed ALH, the country’s largest pub operator, added the Great Southern Hotel in Eden on the NSW South Coast to its regional holdings in a $5 million deal. ALH acquired the pub from the Murray family, who had owned it since 1984.
Back in Sydney, HTL Property’s Sam Handy and Blake Edwards brokered the sale of two well-known city-fringe hotels.
The pair sold the Camelia Grove Hotel in Alexandria, which has future mixed-use development potential, to well-known businessman Jon Adgemis’s Jaga Group for $14 million.
The Old Fitzroy Hotel in Woolloomooloo (which includes a popular live theatre venue) was bought by Michael and Prue Williams, founders of W Property, a commercial property development and investment company.
Figures compiled by HTL show $825 million of hotels – both pubs and accommodation – changed hands in 2020, down from $2 billion in 2019, with 43 per cent of all sales to first-time investors.
“Given the current demand from both domestic and offshore investors, we anticipate there will be more transactions concluded in 2021 than in 2020; at the same time as welcoming a comparatively greater number of newentrants into the national hotel space,” HTL managing director Andrew Jolliffe said.
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