Arthur Laundy shows pubs fetching a pretty penny
Two purchases this week by NSW pub king Arthur Laundy show the heat running through the pub market that has prompted long-time players the Medich family to head for the exit again.
Mr Laundy, NSW’s biggest publican, last Friday struck a deal to buy the freehold of the Woolloomooloo Bay Hotel on Sydney Harbour from the Medich family’s Halcyon Hotels for about $20 million.
The deal came shortly after the Medich family sold the Buena Vista in Mosman, on Sydney’s lower north shore, for about $16m. In the Woolloomooloo deal, Laundy bought the freehold hotel property leased to Woolworths-backed ALH Group, adding to his holdings that include the freeholds of 32 ALH pubs across NSW. The two-storey property recently gained some infamy as an after-lunch haunt of advertising man John Singleton.
But it was the lift in values, particularly of the ALH-tenanted pub, that has surprised, with the property transacting on a yield thought to be about 7 per cent. In 2010, Roy and son Anthony Medich bought the freehold for about $15.5m in a return to the industry by the father, who had been in the pub game in the 1970s.
The pair bought the freehold from Aussie Leisure Group, then comprising Melbourne hoteliers John Ashley, Mazen Tabet and Proko Athanasako. That trio paid about $17.25m for the freehold and lease in 2005 and then installed ALH to run it.
The Medich family also offloaded the Woolwich Pier Hotel, a freehold going concern, to Mr Laundy for a reported $14m. The vendor had bought the pub from listed ING Real Estate Entertainment Fund in early 2011 for $6m.
The latest deals were brokered by Andrew Jolliffe and Joel Fisher of Ray White Hotels Australia. Mr Jolliffe said the Woolloomooloo sale showed that strong ALH leases were viewed as an asset class on their own. “The Laundy family are attuned to the true value of ALH leased freeholds,” he said.
Source: The Australian - 11th June 2015
