Zagame family sells popular Melbourne venue for $35m to Charter Hall
The Zagame family has sold one of the Melbourne CBD’s best-known watering holes, The Garden State Hotel, for $35 million to ASX-listed funds manager Charter Hall, one of the country’s biggest publicans.
On Flinders Lane, the multi-level building’s main offering is the pub run by Australian Venue Co (AVC), a cocktail bar called the Rose Garden on its basement level and, at its rear, Italian restaurant Tippy Tay, which opened in 2021.
The Zagame family sold the freehold for the Flinders Lane building at a price that equates to a 4 per cent investment yield.
The popular venue will be added to Charter Hall’s expanding $4 billion hospitality portfolio.
“This extends our strong relationship with AVC following the privatisation of the $1.3 billion HPI REIT earlier this year,” a spokesperson told The Australian Financial Review.
“Other iconic pubs leased to AVC owned by Charter Hall include the Regatta in Brisbane, and our portfolio of iconic hospitality assets includes Young & Jacksons in Melbourne, leased to our largest hospitality tenant Endeavour.”
Property records revealed the Zagames purchased the freehold of Garden State Hotel in 2007.
The sale marks the biggest pub transaction so far this year in Victoria, followed by the sale of Bells Hotel in South Melbourne for about $20 million, in what’s been a buoyant market nationally in 2025 as institutional investors pour into the sector.
The Zagames have been involved in the hospitality world since 1971 when Victor Zagame acquired the Albion Charles Hotel in Northcote, Melbourne’s inner-north, as well as Matthew Flinders Hotel in Chadstone, the Riversdale Hotel in Hawthorn and Skyways International at Melbourne Airport until 1998.
In 2018, the family put a portfolio of six hotels up for sale – five in Victoria and the Grand Hotel & Casino resort in Vanuatu – with an asking price of about $300 million.
In the same year, Francis Venues snapped up four freeholds owned by the Zagames for a total of $100 million.
JLL’s Josh Rutman, Will Connolly and Ben McDonald with McVay Real Estate’s Sam McVay and Dan McVay managed the sales campaign.
“Properties such as 101 Flinders Lane have consistently attracted and will continue to attract substantial attention from both local and offshore capital, with this transaction providing further evidence of the renewed confidence demonstrated throughout 2025 in Melbourne’s broader CBD market,” Rutman said.
McVay Real Estate’s Sam McVay said there was strong domestic and international interest in the Garden State Hotel.
“[This opportunity] provides any investor seeking a solid foothold in Melbourne’s hospitality scene and in one of the city’s busiest dining and nightlife precincts,” he said.
