Pub sector eyes residential winners in hot housing market
The owners of the Brookvale Hotel at Sydney's northern beaches have joined a wave of publicans exploring mixed-use hotel projects and will sell down part of the site.
Construction company Dyldam paid $50m for the Bull & Bush Hotel and will build up to 300 units on the car park.
The Kelly family, which owns several landmark Sydney hotels, including the Doncaster in Kensington, will sell the carpark of the Brookvale Hotel at Pittwater Road after securing development approval for 73 apartments. JLL's Sam Brewer and Ben Hunter will steer the on-market campaign for the 3455- square-metre site.
The DA allows for a five-storey building with 600 square metres of retail and commercial space and six live-work suites. It is expected to bring about $15 million.
The sale is a prime example of how Sydney's strong housing market has created opportunities for traditional residential players. Industrial companies such as Goodman Group have made hundreds of millions of dollars selling industrial sites to become units.
Now many in the hotel sector are also taking advantage of the favourable circumstances.
Residential builder Dyldam will retain the iconic Bull & Bush Hotel in Baulkham Hills after buying it for $50 million, but is also planning up to 300 units at the site.
The Sam Arnaout-lead Iris Capital, another owner and manager of hotels, has made plenty of noise in Australia's close-knit pub sector. But now it is just as well-known for its residential development plays. Iris boasts an enviable land bank after buying the iconic Bourbon Hotel in Kings Cross and the Cock'NBull Hotel at Bondi Junction, both slated as projects to develop residences above the hotel.
The Brookvale Hotel site sale, which will remain in operation after the sale, comes amid a shortage of approved sites in Sydney's northern beaches, Mr Brewer said. "This site offers an attractive proposition for developers, having development approval, being ready to construct, and the pre-sale market being so strong," he said.
Source: Australian Financial Review Mercedes Ruehl June 4th 2015
