Australian Pub Fund sells three hotels for $47 million
Businessmen Geoff Dixon and John Singleton have sold three iconic Sydney pubs for $47 million.
The deal, one of the last big ones for 2016, was all part of the $300 million Australian Pub Fund’s divestment strategy.
The three pubs are the Peakhurst Inn, Como Hotel and Bristol Arms Hotel.
Bristol Arms Hotel
The Australian Pub Fund, which was out together with investment banker Mark Carnegie, also has other pubs on the market including The Marlborough Hotel in Newtown, and Kinselas in Surry Hills.
The fund has a strategy in place buying up to 20 under-performing pub assets in prime locations and then overhauling them to increase their value and make a big profit.
Peakhurst Inn
Peakhurst Inn, which was sold for $22.5 million, was the largest of the deals. Andrew Jolliffe, Asia Pacific director of Ray White Hotels Australia handled the sale.
The Como Hotel
The Como Hotel, in Sydney's Sutherland Shire, was sold for $5.6 million.
According to Mr Jolliffe, JDA, controlled by John Feros acquired the Peakhurst Inn.
JDA has been active in this space, selling the Tennyson Hotel in Mascot through Mr Jolliffe. The buyer was pub star Justin Hemmes, who paid a record auction price of $37.05 million.
Mr Jolliffe said the sale of the Peakhurst Inn illustrated the level of demand for A-grade freehold hotel assets in the market.
"The off-market sale of the Peakhurst Inn is illustrative of an experienced hotelier buying and selling in the same market; a market that is still unable to satisfy the buy-side demand for quality freehold hospitality businesses in gateway east coast cities" Mr Jolliffe told the Sydney Morning Herald.
Geoff Dixon, chairman of the Australian Pub Fund said it was a good deal for the three pubs.
"We were not actively marketing these three pubs for sale, but the prices offered for all three pubs were at capitalisation rates below 8 per cent and at these prices we decided the time was right to sell. The prices reflect the strong market demand for high-quality venues that are well managed," Mr Dixon told the Sydney Morning Herald.
by Leon Gettler, January 16th 2016
