Andrew Lazarus’s Vauxhall Inn the core in BAM pub fund
The first of more than $500 million worth of hotels was tipped into the ambitious new Bondi Asset Management unlisted pub fund yesterday on behalf of a swag of retail investors.
Publican Andrew Lazarus’s high-profile $28m The Vauxhall Inn in western Sydney’s Granville is the seed asset for the BAM fund, the brainchild of cashed-up former Citibank trader and tourism entrepreneur Stuart King and Mr Lazarus.
Analysts tipped that another western Sydney pub, the El Toro Hotel in Liverpool, would also be swallowed by the BAM but sources said the timing was not right and it would be more likely picked up by Mr Lazarus’s Eastern Hotels Group for about $25m from the listed Lantern Hotels Group.
However, senior sources close to the deal said the El Toro may also be included in a second BAM Fund to be launched by Mr King and Mr Lazarus. The new pub fund’s operation is gaining traction as investment bank Moelis and former Sydney mayor and publican Nelson Meers strive to tie up their acquisition of the Redcape pub portfolio, which hedge funds Varde Partners and York Capital are selling for about $675m.
Like that pairing, BAM is targeting pubs across Sydney’s western suburbs. “We see there is a growth story out west, you don’t have to be a rocket scientist to see all the cranes at Parramatta and Liverpool and the councils understand that the infrastructure they will need will need to be supplemented by significant amounts of private investment,” Mr King said.
Meanwhile, Mr Lazarus has also just sold his Soho Nightclub site in Potts Point, in eastern Sydney, to a well known property developer for about $10.22m through LJ Hooker Commercial associate director agent Tom Barnier.
It is expected the 575sq m Soho Nightclub site fronting 171-173 Victoria Road, Potts Point, will be converted into a retail and commercial building. Mr Lazarus has previously blamed the lack of patrons since lockout laws were imposed by the NSW government in 2014 in a bid to combat violence on his decision to shut the nightclub, which had run for 20 years.
The site is just 100m from Kings Cross train station and Mr Lazarus once considered redeveloping the site himself as a residential development or a boutique hotel.
Mr Lazarus has been active buying and selling pubs for several years. Last year he paid $25m for the Macquarie Hotel at Liverpool buying it from JDA Hotels. He has previously said Sydney’s pub scene is growing, particularly out west. Mr Lazarus could not be reached for comment yesterday.
Source: The Australian, Lisa Allen, Ben Wilmot, 28th January 2016
