Marlborough Hotel on the market
High-profile businessmen John Singleton and Geoff Dixon and investment banker Mark Carnegie have put the Marlborough Hotel in Newtown in Sydney’s inner west on the auction block.
The sale comes weeks after they sold three iconic Sydney pubs - the Peakhurst Inn, Como Hotel and Bristol Arms Hotel - for $47 million, all part of the $300 million Australian Pub Fund’s divestment strategy. The three run the fund with financial muscle added from the Queensland superannuation fund.
The sale is coming at a time when the value of Sydney’s pubs are going through the roof.
More than $500 million of pubs changed hands in 2016.
One of the leaders of the trend was the Lantern Group, which has been in the process of selling down its pub portfolio as it shifts its business focus.
Not surprisingly, the Marlborough Hotel is expected to fetch a good price: $35 million.
Mr Dixon said the timing for the sale was perfect. All they are doing, he said, was talking advantage of Sydney’s red-hot pub market.
“We just felt we bought the portfolio very well; the market is strong so we want to take advantage of the strong market,” Mr Dixon told The Australian.
“We are expecting $35 million for the Marlborough Hotel. It owes us $15.5 million.”
The group snapped up the pub back in 2012 when they were swooping on prized Sydney hotels.
The purchase price at the time was $12.175 million, earning the investors a good profit to be reinvested in other assets.
“We have spent a few million on it and buying yields have come down quite substantially,” Mr Dixon told the newspaper.
Ray White agent Andrew Jolliffe, who has listed the sale, says yields in key Australian cities are heading south.
“With the prevalence of well-priced debt and record revenue levels in some sectors of the industry, the downward pressure in yields is far more pronounced than any upward pressure we’ve seen exhibited,” Joliffe told The Australian.
by Leon Gettler, February 7th 2017
