Merewether Surfhouse sells for $27m as Burleigh Pavilion founder Ben May buys Newcastle landmark

The acquisition expands May’s portfolio of destination waterfront venues through Pavilion Hospitality Group. May is the founder and operator of the Gold Coast’s popular Burleigh Pavilion and adjoining restaurant The Tropic, and is also behind Bali beach club Mrs Sippy and the recently opened Terrigal Pavilion on NSW’s Central Coast. He previously operated Sydney’s historic Manly Wharf Hotel.

May says he was excited to enter the Newcastle market, describing Merewether as sharing many of the qualities that have made Burleigh one of Australia’s best-known beachside destinations.

The deal also carries a personal connection. May got his start in hospitality working for vendors Green and Tierney at The Royal in Paddington and later The Greenwood in North Sydney.

“My first job in hospitality was working for the vendors, Tony Green and John Tierney, at The Royal in Paddington and then The Greenwood North Sydney. As such I have enormous respect for what they have done over the years,” May says.

“We’re very excited to dive into Newcastle and get to know the locals. It’s similar to Burleigh in so many ways.”

The deal was struck a week after an “extremely competitive” international expressions-of-interest campaign closed on August 20, with HTL Property’s Andrew Jolliffe and Dan Dragicevich handing the sale.

Industry reports expected a deal worth more than $25 million, although the selling agents did not confirm the estimate following requests for comment prior to the sale.

HTL says the campaign attracted interest from across the nation, ranging from some of Australia’s best-known hospitality groups to local high-net-worth investors, with the final sales price exceeding initial expectations.

“Pavilion Hospitality Group has rewritten the playbook on how to fit out, operate, and enhance the patron experience in venues that offer unreplacable competitive advantages. With a reputation for creating institutions in Manly, Burleigh and more recently Terrigal; they are sure to further enhance the already burgeoning visitation appeal of Newcastle,” says Dragicevich.

“The interest generated during the campaign was exceptional, and entirely commensurate with the rarity of the opportunity and ability to build on the legacy so proudly established by industry stalwarts Tony Green, John Tierney and Mark Swadling,” Dragicevich adds.

Jolliffe says the deal demonstrates how premium hospitality product is still highly attractive to investors.

“Its magnetism [is] highlighted by the depth of the non-traditional buyer pool we unearthed, illustrating the fact that high cash flow landmark venues will always attract and maintain a premium,” he adds.

The award-winning building is positioned just four kilometres from central Newcastle, a growing NSW regional city that has evolved from industrial port roots to a thriving coastal metropolis.

Perched above the shoreline, the glass-fronted hospitality asset with a restaurant and bar, event spaces and a promenade kiosk and cafe is renowned for its sunset cocktails, uninterrupted ocean views and all-day dining.

The building offers 2277 square metres of floor area on a 1179-square-metre landholding at the southern end of the beach, next to the open-air Merewether Ocean Baths and benefiting from a steady stream of visitors taking the city’s Bathers Way coastal walk.

Each March, the Surfhouse also overlooks the action of Newcastle Surfest, the southern hemisphere’s largest surfing festival, in which more than 800 competitors from around the world contest nine events that attract thousands of spectators. 

“Impeccably constructed, and promoting uninterrupted views of the most stunning coastline, this multilevel hospitality asset is A-grade in every sense,” says selling Jolliffe, managing director of HTL Property. 

“This is one of those assets on Australia’s picturesque shoreline that commands attention on the rare occasion it becomes available to acquire.”

History and modern design

The Surfhouse replaced a 1937-built art deco surf club pavilion that was damaged in the 1989 earthquake and later declared unsafe in 1995. The earthquake – Australia’s deadliest – claimed 13 lives, injured more than 160 people and damaged about 50,000 buildings across Newcastle.

The iconic venue remained in the hands of the long-term ownership syndicate involved in its 2011 development until this week’s deal, which sees May take the helm.

The modern redevelopment reportedly cost between $5 million and $7 million and was financed by the Sailors’ Rock consortium, led by Newcastle businessman Keith Stronach, alongside a group of more than a dozen Merewether locals.

Stronach, the managing director of Stronach Property, secured the 50-year crown land lease and approvals in 2008 from Newcastle City Council.

Designed by Crone Architects, with interiors by CO-AP Architects, the award-winning building incorporated bespoke perforated aluminium ceiling panels and walls lined with 88,000 recycled wine corks to improve acoustics. The project earned recognition at the 2012 Australian Interior Design Awards, while builder Graph Building received a Master Builders Association excellence in building award.

The sale marks the second time the property has hit the market, following a 2019 campaign through Colliers, when the property ultimately remained in the same hands.

The Surfhouse’s most recent vendors include Williams, founder of tech firm Automatic Group and Duchen, founder of pharmaceutical company Arrow Pharmaceuticals, alongside former lawyer Green and brother-in-law Tierney. The pair also once operated The Clock in Surry Hills, which recently changed hands for around $90 million in a deal including The Bank in Newtown.

Multilevel venue offerings

The Surfhouse opens daily, with takeaway coffee served from the ground-floor kiosk alongside the Beach Bar cafe, which offers breakfast and lunch before transforming into a taco bar on Friday and Saturday afternoons.

The top-floor Surfhouse Restaurant serves modern Australian cuisine showcasing Hunter Valley produce and Australian seafood, alongside a rooftop bar offering bar food and pizza.

The second floor is used as a dedicated event space, hosting weddings and other celebrations catering for 40 to 350 guests. Each space has private balconies, a dance floor and AV equipment.

The venue also has public showers and amenities for beachgoers.

According to the selling agents, the property has historically generated annual cash flows in excess of $10 million and has been operated by the same team of pub veterans since opening.

The group acquired the original ground lease for $12 million in 2018 from Sailors’ Rock.

The venue offers “very favourable lease terms”, with up to 35 years’ tenure and peppercorn rent, agents say.

The listing is tipped to attract investors who missed out on Newcastle’s Merewether Beach Hotel, set behind the surfhouse on Frederick Street. The century-old corner pub was acquired by hotelier Glenn Piper in 2022 in a $40 million deal handled by HTL Property.

“Having sold Merewether’s outstanding Beaches Hotel, we fondly recall the market interest generated in irreplaceable Newcastle hospitality assets and expect significant interest in this rare trading opportunity,” says Dragicevich, national director at HTL Property.

Jolliffe says Surfhouse joins landmark beachfront venues such as Manly’s Hotel Steyne and Byron Bay’s Beach Hotel among Australia’s most recognisable coastal hospitality assets.

“Newcastle’s Surfhouse enjoys its place in this esteemed cohort,” he says.

Newcastle is the second-largest city in NSW and sits about a two-hour drive north of Sydney, while the renowned Hunter Valley wine region is less than an hour inland.

Newcastle Airport recently opened a new international terminal, expanded its domestic and overseas routes, and was recognised at the 2026 Australian Aviation Awards for its terminal design, sustainability initiatives and contribution to jobs and economic growth across the Hunter region.

Merewether is widely regarded as Newcastle’s premier beach suburb, combining one of Australia’s best-known surf beaches with a thriving hospitality scene. Acclaimed venues including Peregrin, Roundhouse, Light Years, Humbug and Lock’s Paddock have helped cement the city as one of the nation’s leading regional dining destinations.

Newcastle hospitality momentum

Hospitality investment continues to flow into Newcastle, with MA Financial’s Redcape Hotel Group’s acquisition of Iris Capital’s Hunter Region hospitality portfolio in a transaction worth close to $500 million – the largest freehold going-concern hotel transaction in Australian history.

Newcastle’s night-time economy continues to strengthen, generating $2.3 billion in turnover during 2025 and supporting 13,600 jobs across more than 1000 businesses, according to the Council of Capital City Lord Mayors’ latest report.