Biggest publican verging on biggest pub deal

Australia’s biggest pub operator is considering the sale of a portfolio of its freeholds that would amount to the biggest pub transaction in the industry’s history.

After highly successful divestments of the property titles at venues it operates in NSW, Queensland, Victoria and Western Australia, Australian Leisure & Hospitality (ALH) - which is predominantly owned by Woolworths - is reportedly about to bundle 54 hotel and bottle shop assets into a bulk sale to investors.

Traditional players in this space, including ALE – the listed landlord of around 80 of ALH’s venues – have been involved with negotiations over the portfolio, which is valued in the region of $650 million.

However, the multibillion dollar ASX-listed property fund manager Charter Hall Group (CHG) is rising to the top of the list of candidates, with reports it has secured some form of exclusive negotiating position with the Woolworths/Mathieson-owned ALH.

The Australian reported this morning that the pricing indicates a conservative yield of less than 6.5 per cent, reflecting a strong confidence by the suitor.

CHG did not respond to TheShout's enquiry as to whether its interest in the assets reflected its confidence in the operator or in the wider hospitality industry.

In February CHG posted a 2 per cent increase to its profit guidance forecast, making it 9 per cent for the year.

It is suggested CHG will park a limited amount of its capital in the acquisition, and seek the support of backers such as Telstra Super, with which it has teamed up previously on retail property deals.

Source: The Shout - 3 July 14