Coles divesting Queensland pub assets

The country's second-largest pub operator is offloading some Queensland freehold assets to concentrate on running the businesses.

Coles Property Group is looking to capitalise on the strong investor market by following the trend of divesting freeholds in a 'sale and leaseback' scenario that mirrors ALH strategies and is expected to divest over $15 million worth of assets.

The three hotel freeholds are on offer with long-term leases and guaranteed rental increases to Liqourland Hotel Group – a fully owned subsidiary of supermarket giant Coles.

The hotels will be auctioned individually at Melbourne's Crown Casino 11 December, with live interstate bidding to take place from Sydney and Brisbane.

Values vary from three to seven million, and agents Joel Fisher of CBRE Hotels and Billy Holderhead of Burgess Rawson expect plenty of interest.

"Coles is Australia's second-largest hotel operator, with around 100 hotel venues across the country," said Fisher. "Given the security of the lease covenant, we're expecting strong interest from passive investors – not just from Queensland but right across the country."

"The long-term leases and the blue chip tenancy covenants set these assets apart from other recent hotel offerings," added Holderhead. "The opportunity to purchase a long-term cash flow, backed by one of Australia's largest companies, is not often seen in the investment market."

The move follows the highly successful 2012 sale of four ALH-owned hotels, all leased back to ALH group, which sold for a combined $21.9 million at yields ranging from 7.5 to 8 per cent.

The assets on offer are: The Royal English Hotel in the booming Brisbane fringe of Nundah, the Currimundi Hotel and Currimundi North Motor Inn in the Sunshine Coast's Caloundra, and Taylors Hotel in Mackay. 

Source: The Shout, 20 November 2013