Criterion Hotel lease sold for $15m as market appetite increases
Pub operator Tilley and Wills Co has acquired the leasehold of the Criterion Hotel in Sydney’s Pitt Street for $15 million.
It was sold by Gallagher Hotel Management group, adding to Tilly and Wills Co portfolio which includes the Verandah Bar in Castlereagh Street in addition to operating the Buena Hotel in Mosman and the Clovelly Hotel, on behalf of private owners.
The hotel is set to benefit from a recent $3 million renovation, according to JLL's John Musca and Tom Gleeson, who advised on the sale.
"Sydney CBD hotel opportunities are in very limited supply so, having received 12 bids from suitors across three states and of very differing buyer profiles, it was no surprise to see the hotel operation keenly contested," said Musca.
"Prior to the recent announcement of the Woolworths ALH-Mathieson demerger, ALH sold the long-term leasehold interest in the Cambridge Tavern at Fairfield for $18 million via JLL."
The sale reflected an increased appetite for hotel cash flows under the long-term leasehold tenure model, according to JLL.
"This is supported by the progressive national expansion of KKR’s Australian Venue Company following the completion of the Coles hotels acquisition in March and their mooted earnings push prior to 2020 planned initial public offering," Musca said.
"We see no foreseeable end to the capital flight to the asset class."
Sheridan Randall, 10th July 2019
