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Cardinia Club in Melbourne’s outer south-east has been listed for sale and is expected to fetch more than $18 million, as interest in Victorian gaming venues continues to grow.
The gaming and hospitality venue, located on Racecourse Road, Pakenham, was listed for sale by the Pakenham Racing Club, which will hold an initial 14-year lease worth $1.2 million annually on the site.
The sale includes a 1.65 hectare landholding comprising 105 poker machines, a bistro and dining facility, functions rooms, sports bar and a liquor licence for 425 patrons.
It also comes with “surplus land” at the back of the property behind the car park, which could be used for further developments, CBRE Hotels’ Scott Callow, who is marketing the venue, says.
“As part of the process, we’re happy to talk to the buyer as to whether they’ve got thoughts as to what they may want to use it for,” Mr Callow says. “It’s a talking point at the moment.”
Mr Callow says he expects the sale to receive “substantial interest” from investors looking to cash in on the booming gaming industry in Victoria, and in the growth suburb of Pakenham.
“We expect we will have interest from not only investment houses that focus specifically on this sector, and high-net-worth individuals, but also people attracted by the somewhat finite number of gaming machines that are in the Victorian market,” he says.
Pakenham Racing Club sold the Pakenham racecourse in 2012 for more than $30 million, with the site now housing residential developments. Since then, the club has invested heavily in its new Tynong track, which it bought in 2008.
“They’ve occupied the site for many, many years and sold what was the Pakenham Racecourse off several years ago,” Mr Callow says. “They’ve invested heavily in a new facility at Tynong, and now they’re looking to sell this investment, with them taking up a long-term commitment to remain there.”
Pakenham Racing Club chief executive officer Michael Hodge says the sale is a unique opportunity for buyers.
“This is an outstanding long-term investment opportunity for potential buyers given the attractive yield and security offered by the Club via a long-term secured lease,” Mr Hodge says.
Pakenham Racing Club also sold an adjoining site for the development of a motel in 2015, with construction set to begin by the end of the year. The 25-room Pakenham Mercure will also include conference facilities, and is expected to open by the end of next year.
Once completed, the motel is expected to generate further demand at the Cardinia Club venue next door.
The listing follows the announcement earlier this month that the Zagames are selling off all five of its Victorian pub and gaming venues. The freehold sales encompass 490 gaming machines which generate $94 million of revenue annually.
The $300 million package also includes a casino in Vanuatu, with the venues up for grabs individually or in combination.
Gaming venues are expected to become increasingly hot property this year following state government legislation that extended gaming licenses until 2042, and put a freeze on the number of poker machines in the state for the next 20 years.
“There’s no doubt that certainty builds value, particularly people that are looking for longer-term investments, they can now have greater certainty that gaming is here to stay in Victoria for the next period,” Mr Callow says.