$500 million Pub Fund launched

Pub investor Paddy Coughlan has launched the $500 million Ludlow Pub Opportunity Fund.

The fund is open to local investors and will focus on large-format properties in suburban and regional growth corridors.

The fund, 2which is backed by a large US-based private equity group has already laid down $20.7 million for seed asset the Five Islands Hotel in Cringila, Wollongong. It is backed by

Mr Coughlan, who founded the Riversdale hotel portfolio before selling to the former Australia Pub Fund, run by Geoff Dixon, John Singleton and Mark Carnegie, has come out of hiatus because he sees a big opportunity in large-format suburban pubs.

“The shift to large-format suburban pubs is undeniable, it was a strong trend before COVID and the global pandemic certainly accelerated that shift on the back of a more localised society,” Mr Coughlan said.

“The current cost of debt is relatively low and entry yields on assets are still strong, coupled with the opportunity to unlock value in an asset and the underlying license and property value, the pub sector remains compelling.”

Mr Coughlan and his backers are currently in the later stages of finalising the fundraising and he has urged interested investors to “get in touch”.

The off-market sale of Five Islands was facilitated by JLL hotels.

“Market enthusiasm remains across all hotel business profiles evidenced by the disproportionately large number of transactions being affected in an off-market manner,” JLL vice-president Kate MacDonald said.

JLL has more than $200 million of hotels in negotiation nationally - its strongest first half of activity in 15 years.

Australia’s pub sector has made a considerable recovery after being ravaged by Covid lockdowns and restrictions.  There has been close to $1 billion worth of assets sold since November.

Irit Jackson, 16th June 2021