They might be a bit of a trickier investment than residential property but imagine how much fun you’d have owning a pub

Three hotels have just sold in New South Wales as part of a deceased estate all achieving solid prices.

Known as the Hallmark Inn portfolio, the hotels were the Charbonnier in Singleton, Regency Inn in Armidale and the Hallmark Inn in Tamworth.

They have sold separately through an expressions of interest campaign by Nic Simarro of Savills Hotels Australia and New Zealand.

The Hallmark Inn sold to a private motel operator for about $3 million. It is a 3.5 star hotel with 60 rooms, restaurant, cocktail bar, conference rooms and swimming pool.

The Regency Inn, Armidale sold to a local investor for about $1.5 million. It is a 40-room hotel with licensed restaurant and cocktail bar, swimming pool, sauna and indoor heated spa. 

Charbonnier sold to a Chinese investor for about $4 million, it is a 4 star hotel with 70 rooms.

All three hotels have been bought with the view to renovate, refurbish and rebrand.

Mr Simarro said there had been more than 40 inquiries about the hotels.

He said regional hotels and motels were often the forgotten asset class but for anyone looking for an entry level investment it could be rewarding.

Adrian Archer a director of Savills Hotels Valuation and Consultancy said while returns for hotels and pubs could be good, it was often a higher buy-in price than standard residential investments.

And he said banks usually only lent about 60 per cent to 65 per cent on such assets compared with 80 per cent to 90 per cent on a residential property. 

Hotel broker Peter Power of Power Jeffrey and Co, said the only real “mum and dad’’ buyers that bought such assets were looking to be owner occupiers, not straight investors.

He said it was the bigger players who bought the larger assets with operators in place and in those circumstances the yields could be around 7 per cent or eight per cent.

Mr Power said while it might be a dream of many to buy and run a hotel or pub, there was a lot more to the purchase than just making the right offer.

He said owner operators also had to get liquor licensing approval and gaming approvals if the property had poker machines. 

He has a few hotels and pubs close to settlement at the moment including Eltham Hotel at Byron Bay.

Mr Power said that had been bought by “local people’’ who would run it.

He couldn’t reveal what is sold for but industry sources say a property of that nature would sell for around $2 million.

The “classic country pub’’ which was built in 1902 is at Byron Bay.

It has an outdoor drinking and entertainment a gaming room, and outdoor and indoor dining area.

There are also four accommodation suites.

Also under contract is a hotel at Woodgate in Bundaberg which has been bought by a hotelier and is understood to have sold for around $1.5 million.

Source: New Limited, 28^th August 2015
Originally published as: They might be a bit of a trickier investment than residential property but imagine how much fun you’d have owning a pub