Lantern Group sells Sydenham Hotel
The big news is that the Lantern Group has sold off its big hotels.
The group last week announced it had sold the General Gordon Hotel in Sydenham, out in Sydney's west.
Lantern made a good profit on the sale with the freehold and venue selling in an off-market deal for a whopping $18.1 million. That's a 69 per cent premium on the 30 June 2016 book value, according to Lantern's statement to the stock exchange.
The identity of the buyer has not been disclosed.
All that agent Andrew Joliffe of Ray White Hotels would indicate was that it was picked up by an "existing long-term hotelier".
Mr Joliffe said it was a good sign for the A grade Hotel market in 2017, driven by the general rise in property prices. Added to that, Mr Joliffe said, were the low petrol prices, a lower Australian dollar and stable consumer confidence.
"Fundamentally, the majority of assets are underpinned by property, gaming inventory or both," Mr Joliffe told Commercial Real Estate.
He said this suggested "some continuity and reliability around the current internal and external investor sentiment regarding the asset class".
The place comes with its own unique history.
According to its website, the General Gordon Hotel has been running for 80 years since the 1930s.
It was named after the famous general Sir Charles Gordon, the celebrated military leader who was killed in Sudan during the fall of Khartoum.
IEF, the predecessor of the Lantern Group, bought the Hotel in 2005 from Tooth and Company for $13.5 million.
Lantern's statement makes it clear that the deal will be finalised by the end of next month with contracts of the sale to be exchanged on March 18.
The General Gordon is the second last Hotel to be sold out of Lantern's portfolio.
Shareholders had approved the sell down strategy in November 2016.
It was a significant change.
In the first half of 2016, the company had been selling hotels deemed to be "non-core".
But that all changed in October when Lantern chairman Graeme Campbell and CEO John Osborne recommended selling down the entire portfolio to pay off the company's debt bill totalling $40 million.
Since then, Lantern has sold its remaining hotels. These include Uncle Bucks and Ambarvale Hotels in western Sydney. Others include the Courthouse Hotel in Cairns, as well as Five Dock Hotel and the Waterworks Hotel in Botany.
On Friday, Lantern announced it had also sold the Crown Hotel in Surry Hills for $26.1 million, a 51 per cent premium to the 30 June 2016 book value.
by Leon Gettler, February 13th 2017
