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Pub Sales Spill Over $330m in Six-Week Session

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Strong demand for hotel assets is losing none of its fizz with the latest round of pub sales in New South Wales serving up a six-week session of transactions totalling more than $330 million. 

In the most recent deal, Minskys Hotel—a late-night watering hole at Cremorne on Sydney’s lower north shore—has changed hands for the first time in nearly two decades for $39 million. 

Sydney-based hotelier Mitchell Waugh’s PHMG Group has partnered with the family-owned Karellas Group to acquire the asset from MA Financial-backed Redcape. 

JLL Hotels’ John Musca, Ben McDonald and Gordon McFadyen were the agents and fielded 65 inquiries from what they described as a wide-ranging domestic buyer pool. 

The asset comprises 3344sq m— including 1700sq m of commercial space above the pub—as well as a separate bottle shop, 4am trading approval and 25 gaming machines with a circa $160,000-plus weekly revenue 

McDonald said the deal was further evidence of the pub market’s “insatiable appetite and cross-sector appeal”. 

He said the underutilised first floor commercial space and bar areas were a key drawcard for buyers seeking to unlock the full commercial and trading potential of the asset. 

“The opportunity to seize an asset of such quality with obvious and significant value-add potential via repositioning and/or strategic sell down, fueled what was one of the most competitive campaigns we’ve managed in the last five years,” Mr McDonald said. 

The Minskys Hotel sale is one of eight hotel transactions over a six-week period in April-May totalling more than $330 million. 

Former Sydney lord mayor Nelson Meers paid a record $160 million for the Crossroads Hotel in Casula in Sydney’s south-west. 

It was followed by a string of deals including the landmark Pendle Inn Hotel transaction ($75 million) in western Sydney as well as the sales of Lake Macquarie Tavern ($33 million), Amble Inn at Corindi Beach ($12 million), New Ivanhoe Hotel at Blackheath in the Blue Mountains (circa $6 million), Globe Hotel at Deniliquin (circa $6 million) and Post Office Hotel at Gulgong (circa $5 million). 

McDonald said there was still a significant depth of capital seeking to invest in the hotel space and JLL was in the final stages of negotiating further asset sales worth more than $250 million. 

According to sales agents, $1 billion in transactions  are forecast this quarter. 

While hospitality took a significant hit through the rolling lockdowns of the pandemic, the appetite for pubs went unabated, with New South Wales banking almost $1.5 billion in transactions across the sector last year. 

Ray White Commercial head of research Vanessa Rader said demand for pubs took a “strong positive turn in 2021” and the trend was forecast to continue

“Looking at NSW alone, $1.427 billion worth changed hands in 2021—this was up 143.88 per cent on 2020 results. 

“With 2022 starting off with a bang, momentum has continued at a rapid pace, with records continuing to be broken and new highs achieved in value for assets in metropolitan, regional and coastal markets,” Rader said.

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Article originally posted at: https://www.theurbandeveloper.com/articles/minskys-pub-cremorne-sales-hotel-market