Laundy snaps up Woolloomooloo Bay hotel from Medich family

NSW’s biggest publican Arthur Laundy has added to his roster of pubs with the purchase of The Woolloomooloo Bay Hotel on Sydney Harbour from the Medich family’s Halcyon Hotels for about $20 million.

The deal comes shortly after the Medich family sold the Buena Vista Hotel in Mosman, on Sydney’s lower north shore, for about $16 million after buying it last year for $13 million, and show the surge in Sydney pub values.

In the Woolloomooloo deal, Laundy will buy the freehold hotel property that is leased to Woolworths-backed ALH Group, adding to his holdings that include the freeholds of 32 ALH pubs across NSW.

The two-storey property is one of Australia’s best known watering holes, with patrons ranging from local dockside workers to Woolloomooloo Wharf restaurant patrons, and has recently attracted fame as an after-lunch haunt for advertising man John Singleton.

The deal was brokered by Andrew Jolliffe and Joel Fisher of Ray White Hotels Australia.

Mr Jolliffe said the sale was negotiated behind closed doors on behalf of the Medich family.

“A series of high-profile hotels have sold in the past 12 months, including the Tea Gardens in Bondi Junction, the Mona Vale Hotel, Northies in Cronulla and the Newport Arms Hotel, which was sold last month for the Bayfield family,” he said.

“The Woolloomooloo Bay Hotel patently enjoys the same paragon of the industry status as these icons,” Mr Jolliffe said.

Such A Grade hotel properties indexed to strong ALH leases are viewed as an assets class on their own and their value is rising.

Property fund manager Charter Hall Group has entered the sector and ALE Property Group has long invested in ALH freeholds.

“Clearly the Laundy family are attuned to the true value of ALH leased freeholds, and consequently now plan to add the Woolloomooloo Bay Hotel to their stable of 32 existing ALH leased properties,” Mr Jolliffe said.

Charter Hall and superannuation fund Hostplus bought about 54 ALH freeholds in 2014 and since that time very few investment grade hotel assets have come to market.

The ALH-leased freehold hotels Magnums Hotel in Airlie Beach, Queensland, and the Cambridge Tavern in Sydney’s western suburb of Fairfield sold last year for $17.5m and $20m respectively, Mr Fisher said.

Source:  The Australian - 8th June 2015