$100m of Adelaide hotel sales sees records broken
In a flurry of transaction activity not seen for nearly two decades, Adelaide has witnessed over $100 million of pubs change hands.
One of the largest industry stakeholders in Adelaide, GM Hotel Group, have sold down three of their Adelaide based-hotel portfolio in nearly $75 million of transactions.
GM Hotels divested the Emu Hotel & Bottleshop, Christies Beach Hotel and Lodge Hotel assets all off-market to both local and national operators.
The Emu Hotel & Bottleshop was just sold by JLL Hotels & Hospitality Group for $32m, the largest price paid for a single pub asset in Adelaide ever.
ALH Group acquired the long-term leasehold interest of the hotel and separate bottleshop in association with Charter Hall Group, already their largest representative landlord nationally.
JLL Managing Director John Musca negotiated the sale and said that, “No matter where you are in the country, the largest, quality hotel assets will always attract the most astute capital and operators due to their irreplaceability, and the Emu transaction is no exception to this acquisition approach”.
The Emu sits on a ~7,300sqm freehold site area and included public and bistro bars, large bistro, entertainment room, gaming room with 40 EGMs, large drive through bottleshop plus a separate leasehold bottleshop situated in the adjoining Morphett Vale Shopping Centre where Woolworths is the anchor tenant.
Christies Beach Hotel was sold to local hoteliers RD Jones Group and occupies a 4,250sqm site and includes public bar, bistro and bistro bar, large drive thru bottleshop, motel and gaming room with 35 EGMs.
The completely renovated, award-winning modernist styled Lodge Hotel was purchased by Sydney-based Harvest Hotels and is situated on a ~12,000sqm site area with 34 EGMs. The sale was the second acquisition for the group in their new suburban Adelaide-focussed fund, Harvest Pub Fund 3.
Harvest also acquired the Aussie Inn from a local private syndicate as their first interstate investment with the hotel situated on over a 1.3-hectare site with 40 EGMs and including bar, lounge bar, bistro, TAB auditorium, beer garden and large detached Thirsty Camel branded drive-thru bottleshop.
“Harvest were astute in identifying the additional value and trading trajectories of Adelaide hotels emanating from the new gaming legislation and corporate consolidation, amidst a tightly held yet disparate market of individual owners, and in association with Terry Board, we are delighted to have managed their first forays into the booming asset class locally”, Musca suggested.
Harvest Hotels already operate 8 hotels in NSW and raised $50m of committed equity in their first-round subscriptions earlier this year for the Adelaide specific Fund 3. Having conducted their market research in H2 2021 and identifying the state-based sector opportunities. Managing Director Chris Cornforth commented that “Our market entry has been measured and methodical and has resulted in securing some quality suburban Adelaide assets for the fund, so we’re thrilled for our investors. It’s satisfying to see the aggregation strategy roll-out and we’re pleased to be getting off to a robust start”.
GM Hotels Managing Director Greg Maitland suggested, “We’re very happy with the outcomes in what is a significant period of transition for the Adelaide hotel trading landscape following recent changes in gaming legislation and wish all purchasers every success with these irreplaceable large-format suburban assets”.
JLL Hotels & Hospitality Group, 9th August 2022
