The new owners of the Kinselas watering hole in the inner Sydney enclave of Taylor Square are planning to merge the site with the nearby Courthouse Hotel to create a large pub complex with accommodation and rooftop harbour views.
Private equity firm Moelis Australia, which owns the Beach Hotel in Byron Bay, added to its burgeoning pubs stable with the purchase of the well-known Darlinghurst hotel in a deal worth $67 million. Moelis announced it had paid $45 million for Kinselas on Wednesday after spending $22 million for the Courthouse last month.
The sale is the latest in a line of top-tier premium pub sales as investors take advantage of the turnaround in the sector as the coronavirus restrictions for pubs and patrons are eased across New South Wales and Victoria.
Moelis acquired Kinselas from the Kospetas family’s Universal Hotel Group, who acquired the pub from former Qantas executive Geoff Dixon and ad-man John Singleton in 2017 for reputed $23 million.
Moelis Australia Hotel Management chief executive Dan Brady said, buying the two pubs gives the group the ability to create a ‘super pub’ complex and the opportunity to add value with an additional accommodation hotel.
“Both venues in their own right are quality freehold going concern assets that will benefit from our platform expertise and the reopening of Sydney following the repealing of lockout laws back in January,” Mr Brady said.
He said the location near to the fine arts school and previous historic Darlinghurst Courthouse, presents an investment opportunity to extract significant “growth synergies” through near term earnings growth and longer-term development potential.
“With capital investment, we are excited to reposition the existing venues and unlock the future potential value of this prominent site.”
These recent transactions round out a big year for Moelis Australia Hotel Management (MAHM), the Moelis Australia owned investment manager and hotel operator platform which acquired the Beach Hotel Byron Bay for a record $104 million in February this year.
“More people are coming back to pubs post the global pandemic as the venues are the hub of a community and they offer patrons a sense of connection. We intend to unleash a vision for these two new pubs to turn them into a new hub for the area,” Mr Brady said.
Paul Fraser, CBRE Hotels director said while restrictions are easing, pubs still face some pressure to adhere to COVID-19 regulations.
Mr Fraser said as COVID-19 cases in Australia remain contained, the industry still faces a litmus test over the next 12 to 18 months but is expected to bounce back.
“Pubs must therefore be leaner, smarter and, more importantly, create a unique place for human connection in order to succeed in this environment,” Mr Fraser said.
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