Manly's Hotel Steyne could reap $70m for pub consortium
A consortium of some of the biggest names in property are looking to reap up to $70 million from the sale of the well-known Hotel Steyne in Manly, on Sydney’s northern beaches.
Advertising entrepreneur John Singleton, property investor Robert Whyte, the Laundy publican family, led by father Arthur, and investor Mark Carnegie teamed up in November, 2010, to buy the strife-ridden venue for a reported $27 million.
At the time it was a massive discount on the $47 million that pub investor Bruce McHugh and his family had paid in 2006, just before the pub market peaked.
Now, after seven years and amid solid prices for other venues, the consortium has decided to sell. Similar pubs have garnered between $60 million and $70 million.
It is the only time the four identities have joined forces and are said to have a policy that if one wants to sell then “they all sell”.
It comes as the pub market is soaring with more than $1 billion worth of assets changing hands last year and already close to $100 million worth in the market in the first two months of 2019.
The pub is across the road from Manly beach. Photo: Supplied
While investors remain in the sector, it is the owner-operators with a passion for food and entertainment that are snapping up the venues.
Going are the days of beer and burgers, being replaced with high-profile chefs, good wine lists and a lot less reliance on poker machines for revenue generation.
HTL Property Asia Pacific managing director Andrew Jolliffe said there was a range of likely buyers, from the listed pub sector to private investors or another consortiums.
“We’ve been very fortunate to be engaged to sell a number of the nation’s signature hospitality offerings, but the Hotel Steyne is arguably the most prolific and certainly well-known beachside hotel, with generations of locals and tourists frequenting this noteworthy institution,” Mr Jolliffe said.
Originally built in 1859, and then remodelled by Tooth & Co in 1936, the Hotel Steyne is seen as Manly’s true local with six bars, two restaurants, a designated gaming room with 30 poker machines and an entire level of accommodation.
“The opportunities for upside business levers within the hotel are patently clear, including the augmentation and repositioning of the accommodation offering,” Mr Jolliffe said.
“However, underwriting this total investment thesis is the ability to own almost 2000 square metres of beachside freehold land on one of the world’s most picturesque and well-known beaches.”
“The fact that this extraordinary opportunity exists on the very beach TripAdvisor has just announced as the number one beach in Australia ahead of the Whitsunday’s hugely popular Whitehaven Beach, makes it all the more strategic and compelling an investment proposition.”
Mr Singleton, Mr Carnegie and former head of Qantas, Geoff Dixon, entered the pub sector close to a decade ago when they bought into the former Riversdale group. It owned a number of Sydney pubs such as the Toxteth, Vic on the Park and Kinselas Middlebar.
But over the past few years, after a possible float was disbanded, the trio have been selling down the assets. The Steyne was separate and also included Mr Singelton’s mate Gerry Harvey.
Mr Whyte and Mr Singleton also own the 17 billboards around Sydney airport, worth about $80 million combined, and last year tested the market for a sale, but later withdrew the assets.
