Pub deals reach $200m in two-week sales blitz

The deals mark an end to a busy year in the pub sector, which has been characterised by the sale of assets held by family businesses for many decades.

The new industry players are more focused on offering high-end food and entertainment with less reliance on gaming machines as the main revenue streams.

In the latest deal, the Sydney Short family, led by Roz Short sold the sprawling Seabreeze beachside pub and adjoining commercial property holdings. The Short family bought the pub 2001. The sale was part of a rationalisation of the family’s portfolio and was completed by HTL Property’s national pub director, Dan Dragicevich and Andrew Jolliffe.

Sitting on an imposing 3816 square metres of land in the South West Rocks’ CBD, the pub comes with three commercial properties. The large-format hotel has multiple revenue centres, including food, beverage, gaming, wagering and accommodation.

“My entire family has enjoyed a long and favourable history with this wonderful hotel, and as such we have enjoyed our period of stewardship immensely,” Short said.

“We wish the new owner every success and look forward to seeing the hotel and the township prosper in the way both so richly deserve.”

“True beachfront hotels such as the Seabreeze are emblematic of Australian surf culture in its purest form, and are unsurprisingly very rare and therefore aggressively sought after,” HTL Property national pub director, Dan Dragicevich said.

HTL Property managing director Andrew Jolliffe added while transaction volumes have traded at a discount to the corresponding period, “strategic acquisitions and divestments remain of the utmost importance to all investors who take a view of the market that exceeds the short term”.

In the case of Redcape which is now part of the MA Financial group, it will also realise cash to pay for its fund’s redemptions which it put on hold in July. The fund has raised about $150 million, across the sale of seven hotels within five months, which represents over 10 per cent of its original portfolio.

“We informed investors in July of our strategy to leverage the depth and quality of our portfolio to strengthen the balance sheet through selective divestment,” Redcape managing director Chris Unger said.

Aside from the Annan sale, Redcape has exchanged contracts to sell two further pubs, the Eastern Creek Tavern and the Unanderra Hotel in Wollongong.

The off-market sale of Unanderra Hotel for $14.5 million was managed by JLL Hotels & Hospitality Group to the private Oscars Hotel Group.

It follows Redcape’s recent sale of the nearby Central Hotel, Shellharbour for $25 million by JLL managing director John Musca and executive vice president Ben McDonald.

“Having facilitated the sale of the nearby Five Islands Hotel for Oscars in 2021 the group has been keen to replicate its success and explore opportunities in the area given its strong historical trading performance,” Musca said.

This is the second sale in as many weeks for JLL Hotels having recently announced the sale of the Salisbury Hotel in Stanmore by McDonald and senior vice president Kate MacDonald for $17 million.

HTL Property brokered off-market deals for the sale of Eastern Creek Tavern to the private Falcone family and the Mount Annan Hotel to Nicole De Angelis-Hood, the niece of pub baron Arthur Laundy. The venues were sold for a combined value of more than $70 million.

“In addition to the successful divestments, we are seeing improved trading dynamics across our portfolio as pubs continue to be a popular choice for customers,” Unger said.

“This combination supports our confidence in the sector and positions the Fund well for investment in further growth initiatives and a sustainable reinstatement of the funds’ liquidity facility in due course.”

Jolliffe said there have been some significant asset sales this year.