Chinese investors snap up iconic Melbourne hotel
Another hotel looks like it could soon be replaced by luxury apartments with Chinese investors picking up one of Melbourne’s most famous pubs, the Beach Hotel in Albert Park for about $18 million.
The Beach Hotel is best remembered for the disastrous investment made by the Collingwood Football Club, led by media personality Eddie Maguire.
Collingwood paid $7 million for the pub in 2007 as part of its strategy to create other revenue streams to its business model. But the investment sent the club's finances into the red threatening its survival.
In the end, John Symond's Aussie Home Loans came to the rescue bailing Collingwood out with a big sponsorship deal.
The two level pub built in the 1880s on the corner of Beaconsfield Parade and Victoria Avenue, overlooking Albert Park Beach offering function rooms, a courtyard bistro, 12 guest rooms on the upper floor and 32 poker machines, along with the bar and dining room
The business has since been turned around and is now profitable again. What’s more, the pub is now part of an asset class that’s attracting a lot of investor interest with a number of hospitality venues now selling for record prices.
The Beach Hotel, along with the neighbouring Foodworks supermarket, was sold by business interests associated with well-known hotel broker Terry Board of TJ Board & Sons. The deal was negotiated by Scott Callow of CBRE Hotels alongside CBRE's Mark Wizel who confirmed the sale but didn’t want to go into too much detail about the buyers.
They sold it on a tight yield of about 4.2 per cent. It’s an attractive deal for investors with pub and supermarket generating annual rent of about $758,000. Both are on long term leases.
But significantly, it could be making way for apartments.
It’s been sold with redevelopment clause that allows any new owner to terminate the leases at short notice.
Based on the current height limits, the next development would sit somewhere between three and five storeys.
by Leon Gettler, April 11th 2017
