JLL sells Grand Hotel for undisclosed sum as pub market heats up
The pub investment sector is closing out a busy year with more than $1 billion worth of deals completed, of which the Charter Hall purchase of the Woolworths portfolio was the biggest.
Agents say demand for well-run, well-located pubs is high, but with the new lockout laws in the city and fringe areas, the suburban hotels are now in the sights of investors.
One of the latest deals was the sale of Grand Hotel, Rockdale, through JLL Hotels & Hospitality Group's vice president of investment sales, Sam Handy.
No sale price was disclosed, but similar properties have sold for about $25 million.
Under private ownership of the Goff family for the last 35 years, the pub is located in one of the state's strongest gaming LGAs and consistently ranks amongst the very best gaming hotels in Sydney. The hotel is located within the commercial/retail heart of Rockdale, across the road from the train station and surrounded by several large council car parks.
It has a 24-hour liquor licence and 30 gaming machines with only 15 currently in the smoking area.
"The Grand Hotel represented one of the most anticipated Sydney gaming pub opportunities over the last five years. Assets such as this are seldom publicly offered to market and this was reflected in a keenly contested process which yielded five offers to purchase," Mr Handy said.
"The market has recognised that there is a diminishing availability of top 50 Sydney gaming pubs with business drivers such as those demonstrated by the Grand Hotel."
JLL's agents have transacted a number of deals in Sydney pub sales across 25 separate transactions in 2014 and this particular sale ranks alongside their other gaming pub transactions this year including the Vegas Hotel for $25.12 million, the Palms Hotel for $22.5 million, the Wiley Park Hotel for $15.5 million and the Crest Hotel in Kings Cross for $19.2 million.
JLL is also selling the Bourbon hotel and adjoining former Swans Club in Potts Point, for publican C.inc Hotels' managing director, Christopher Cheung.
The sale has been prompted by the lockout laws in the inner city and also his desire to focus on his other assets, including the Coogee Bay Hotel and Cruise Bar, Circular Quay.
Another large sale by JLL was the Hotel Bondi, to one of the sons of the original owner, the late Cyril Maloney, for about $43 million. The agents also sold the Waterworks Hotel in Botany for $8.25 million to the Lantern Group.
Ray White's Asia-Pacific hotel director Andrew Jolliffe recently sold the Tea Gardens Hotel in Bondi Junction for $36 million and the Northies and Mona Vale pubs, for a combined $57 million, to the Laundy family and Fraser Short consortium.
Daniel Dragicevich, the director of CBRE Hotels, who recently sold the Rose and Crown at Parramatta, said the NSW Hotel market, while still segmented across location and asset type, is generally very buoyant.
"Demand outstrips supply for many asset types as favourable lending conditions continue to prevail, on-premise trade is strong and the legislative environment remains relatively clear."
