Popular Melbourne pubs up for grabs as demand heats up
Lamaro’s Hotel is leased on a 10-year initial term to former Western Bulldogs player Paul Dimattina. Photo: Joe Armao

Popular Melbourne pubs up for grabs as demand heats up

A slew of popular South Melbourne pub freeholds and leaseholds are set to change hands as the inner-city hospitality sector revs up.

The leasehold for the Raglan Street watering hole, The Rising Sun, has changed hands not long after the pub hosted a crowd of Sydney Swans supporters watching their team suffer a scorching loss in the AFL Grand Final to Geelong’s Cats.

The venue’s publican Hayley Wakefield said she took delivery of 100 barrels of beer in September to cater for the crush of Swans supporters.

Now the 30-year lease over the two-level corner hotel, which can host 324 patrons, has sold to another operator in an off market deal negotiated by CBRE’s Mathew George who declined to discuss the price.

George said he was seeing a lot of interest in pubs, with many operators looking to expand into other venues.

“Pubs are typically all trading well in these areas, most of them seven days a week now, in stark contrast to some retail strips where smaller cafes, bars and restaurants are trading under significantly reduced opening hours, some only open from Thursday evening onwards,” he said.

Nearby in Cecil Street, opposite the South Melbourne Market, Spotlight Group founder Morry Fraid and his nephew Isaac Fried are looking to resurrect of the Market Tavern whose doors have been closed for several years.

Spotlight’s owners are offering a lease over the corner pub at 115 Cecil Street after it has been redeveloped with a ground floor bar, cocktail and whiskey corner, a restaurant and bar on level one, a showpiece kitchen and interactive dining space on level two, and on the rooftop a bar overlooking the inner suburbs.

George, and colleagues Jason Orenbuch and Scott Callow, are handling the campaign. The refurbishment is expected to be finished by Easter 2024.

Buyers are circling another popular venue, the Coppersmith in Clarendon Street, where both the leasehold and freehold are up for grabs, although George said he has been approached by a number of publicans interested in running the business rather than purchasing the freehold.

The redeveloped pub has five levels with the upper floors converted to boutique accommodation across 15 rooms. It also boasts a rooftop bar and fine dining on the ground level and is expected to fetch between $7.5-$8 million as a going concern.

JLL’s Will Connolly is overseeing the sale of another South Melbourne landmark, Lamaro’s Hotel further along Cecil Street from the Market Tavern.

The pub is named after long-term owner of 20 years Pam Lamaro. “Our journey at the hotel has certainly been a rewarding one, with Lamaro’s now being a quintessential part of Melbourne’s revered pub culture,” Lamaro said about selling.

The venue is leased on a 10-year initial term to former Western Bulldogs player Paul Dimattina and has a further 10-year option and rental growth with 4 per cent annual increases built in.

It comes with three apartments on the first and top floors. “Early interest in the hotel component of the asset indicates an aggressive yield below 5 per cent,” Connolly said.

The last significant pub sale in South Melbourne was The Emerald which changed hands for around $6 million in 2020.

On the other side of town, another popular venue, the Quiet Man Irish Hotel in Kensington, is back on the market after four years.

The Quiet Man sold in 2018 to a Vietnamese development consortium for $6.025 million and is now looking for a buyer with expectations around $8 million.

The popular Irish pub at 265-271 Racecourse Road was set to be demolished and replaced by 41 apartments over six levels, but the project never got off the ground and the permit has now lapsed.

The current lease has about two years to run, said Knight Frank’s Stephen Kelly.

“It’s under-let at the moment. A new owner could crank up the income and, ultimately, they will be sitting on a corner development site,” Kelly said.