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Three outback roadhouses tipped to fetch $30 million

September 13, 2018

The Nullarbor Roadhouse. Photo: Supplied

A portfolio of popular outback roadhouses is delivering some of the highest returns of any commercial assets in the country, according to the agent who is selling them.

“Great outback assets can earn the owner an absolute motza,” said Trudy Crooks, sales manager of Resort Brokers Australia, who estimated the three properties, in South Australia and the Northern Territory, had earnings growth of “between 10 to 15 per cent” a year.

They are being sold together with a $30 million price tag.

Perhaps the best known, the Northern Territory’s Erldunda Roadhouse – “the centre of the centre of Australia” – is on the turnoff to Uluru, 200 kilometres south of Alice Springs.

It has a Shell roadhouse, 46 motel units, 96 caravan sites, a restaurant, bar and takeaway, phone and internet service, as well as a menagerie that includes 30 emus, countless kangaroos and a camel.

The Erldunda Roadhouse, on the turnoff to Uluru. Photo: Supplied The Erldunda Roadhouse, on the turnoff to Uluru. Photo: Supplied

The other two are in South Australia, ‘neighbours’ on the Eyre Highway across the Nullarbor despite being 200 kilometres apart. The Border Village Roadhouse, by the Western Australian border, has a BP station, 34 motel rooms, three backpacker rooms, five cabins, 24 caravan sites, a licensed restaurant and bar, convenience store and 10 gaming machines. The other, closer to Adelaide, is the remote Nullarbor Roadhouse, with 27 rooms, 74 caravan sites, an airstrip, fuel, restaurant and bar.

Ms Crooks said the three roadhouses could also be purchased individually, and were priced from $7.5 million to $14 million, depending on turnover and profit.

The portfolio showed an overall net profit in 2017-2018 of $4.3 million, on a turnover of more than $20 million.

“They can be easily managed remotely by investors as they each have great management teams and staff in place,” she said.

“Or they might appeal to an owner-occupier who’s looking for a change of scenery. Either way, the returns are so much better than anything else you can buy, as visitors have to stop at these places for fuel and food and to sleep. There’s nowhere else, so no competition.”

The sale comes at a time when domestic tourism is growing strongly, with Tourism Research Australia showing that, year ending March 2018, overnight trips were up 7 per cent to 97.8 million, visitor spending was up 5 per cent to $65.1 billion and nights stayed were also up by 5 per cent to 350.6 million.

South Australia seems to be proving particularly popular, with 6.4 million visitors over that 12 months, up 5 per cent.

The Erldunda Roadhouse is on 4 hectares. Photo: Supplied The Erldunda Roadhouse is on 4 hectares. Photo: Supplied

Peter Clay, the general manager of research at the Caravan Industry Association of Australia, said that the number of tourists driving the highways and byways of outback Australia was growing significantly.

“We’re seeing a lot more people now hitting the road, from grey nomads and families to young people,” he said. “With the exception of Airbnb, camping and caravanning is the fastest growing commercial accommodation sector.

“It’s growing fast every year, with more and more people doing the big lap around Australia. South Australia, at the end of December, hit 1 million total visitors going to the state to camp and caravan for the first time, and Northern Territory had 1.6 million camping and caravan nights at the end of December, up 1.4 per cent from the previous year.”

Australians are becoming more aware of the sights and experiences that the outback can offer, said Drew Kluska, the founder of luxury outback adventure company The Tailor.

“Australia is one of those few places on the planet that has a really pristine environment without the numbers of people you see elsewhere in the world,” he said. “There’s also the wildlife you don’t find in other places, and more and more tourists are looking for different experiences.

“Outback tourism is definitely going forward very strongly.”

The portfolio of the three outback roadhouses is being sold by the private Brisbane-based company Nullarbor Holdings, which is run by two entrepreneurs who have owned them for the last seven years. They’re now planning a complete change of scene – going into commercial fish-farming.

 

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