Newtown’s flagship hotel, The Marlborough, was sold by the Australian Pub Fund (APF) to a company managed by Bruce Solomon and Matt Moran’s hospitality group Solotel.
The Marlborough Hotel was added to four other hotels that Solotel manages in the Newtown area, and the group expects to be operating over 30 hospitality businesses in Sydney and Brisbane by the end of the year.
Ray White Asia Pacific Director Andrew Jolliffe, who was the agent for the sale of the hotel said that the level of international interest was significant and was reflective of material off-shore equity tranches looking for a home in high yielding Australian property investments with exposure to management functions, and business operation.
The sale of the Marlborough Hotel by the Australian Pub Fund represents the fifth successful sale in as many months for the unlisted group. Following the sale of the Marlborough, the Australian Pub Fund will have five pubs remaining, including three in Sydney and two in Brisbane.
“The Marlborough was a unique proposition given both its sheer scale, and proximity to both Sydney University and RPA Hospital,” APF CEO Andrew Gibbs said.
“The large footprint the hotel adorns, complete with multiple outdoor areas and 30 very valuable gaming machines, enabled us to significantly grow the earnings of the pub during our ownership period.”
The acquisition by a Solotel managed company comes not long after its takeover of the Clovelly Hotel, which has helped to build the group’s reputation as a key players in the national hospitality landscape.
Mr Jolliffe said a new class of freehold hotel has begun to appear in the form of Super A Grade hotels.
“Amongst a number of others, over the past six months we have sold six landmark freehold hospitality properties we believe can be distinctly classified as super A-grade hotels.”
He said a ‘super A-grade hotel bears an amalgam of unique characteristics such as prominent locations, significant, and high quality commercial property square metre coverage. They are often adjacent major transport centres and other key drivers of patronage such as universities, shopping centres and major residential development.
“In addition to the strong property fundamentals referred to above, acquirers of Super A Grade hotels seek exposure to business models which enjoy multiple revenue streams, preferably incorporating the ownership and operation of gaming devices, and with both heritage and evidence of deep historical revenue generation,” Jolliffe said.
“We have approximately $125m worth of other Super A Grade hotel assets currently under agreement nationally, and consequently can see well beyond 2017 in terms of positive runway and a compelling investment argument to support longevity in terms of demand for this asset class.”