Three Queensland pubs sold as real estate roars to life
The Australian pub industry is showing signs of a real estate resurgence, with investors displaying renewed confidence in the sector.
In a significant deal, MA Redcape Hotel Group has acquired three well-known Queensland pubs for a combined $66 million. The purchased properties include The Lucky Tree Tavern in Durack, The Willow Hotel in Moorooka, and the Commercial Hotel in Redbank.
This acquisition highlights the growing appeal of Queensland’s pub market, particularly for investors seeking higher returns compared to other regions. MA Redcape Hotel Fund Managing Director Chris Unger stated that the fund is actively seeking properties with significant redevelopment and refurbishment potential, aiming to unlock value and drive future growth.
“This tactical management of our portfolio may also include the divestment of some assets as accretive market forces determine,” he said.
Publicans Peter Braithwaite and Brendan Lawless offloaded The Willow Hotel and Lucky Tree Tavern, while industry veterans Patrick Ryan and Peter Filipovic parted ways with the Commercial Hotel in Redbank Plains.
HTL Property brokered the sales of the three freehold going-concern hotels, while agents Daniel Dragicevich, Glenn Price, and Andrew Jolliffe handled the deals.
According to Dragicevich, there’s been a notable shift in buyer sentiment this year. Purchasers are more proactive in seeking out assets to expand their portfolios.
Price noted that record-high Gaming Machine Authority values and growth in both on and off-premise trade are attracting significant interest from corporate groups, institutions, and private syndicates.
HTL head Jolliffe highlighted a flurry of December sales that have set new benchmarks across Australia, impacting both capital city and regional markets.
“We are forecasting an increased volume of transactions for the next 12 months when compared to the most recent years,” he said.
In a year of recovery, Redcape’s trading performance was strong, with year to date like-for-like venue earnings up 11 per cent, and the fund also refinancing debt.
Redcape has expressed renewed optimism about the market, reaffirming its two-year total return target of 15%. To capitalise on this, the company has increased its distribution guidance and is actively pursuing additional venue acquisitions.
The company is currently in advanced due diligence on several venues, aiming to invest an additional $120 million. This follows the earlier sale of other pubs to meet redemption requests. These new acquisitions are projected to deliver an initial blended yield of approximately 11.5%, significantly higher than the 7% yield from the recent sale of the Eastwood and Australian Hotel Brewery. Redcape anticipates further value creation as it takes ownership of these new venues.
Jonathan Jackson, 19th December 2024
