In a stock-starved market where strong regional pubs are becoming the ‘new black’ – two more Sydney-satellite freeholds will soon test the waters at a group auction.
Murphy Hotels is putting up the large-format Belmore Hotel, dominating Maitland’s main street. The Art Deco building has recently seen a $2.5m facelift, modernising the business while retaining its historical charm, and boosting historic earnings.
It famously features a 24-metre-long bar, and now boasts a new ‘premium sports TAB area’ to further its gaming repertoire.
In the south of Sydney, the Denmeade Group is offering up Wollongong’s Unanderra Hotel, occupying a sizeable 3,700 m² block opposite the massive Wests Illawarra sports club. It too has seen a recent renovation, with “strategic capital” applied to its gaming offering.
On 31 May both properties will be auctioned at the offices of Ray White, alongside Picton’s iconic George IV Hotel.
Ahead of the auction, the Belmore is being marketed by Ray White Hotels, and the Unanderra Hotel marketed by Ray White in conjunction with CBRE Hotels.
“This phenomenon of profitable hotels adjacent large-format clubs, is linked to a combination of the constant patron activity a successful club operation will generate for a precinct, as well as the point of difference a modern hotel operation offers a community,” explains CBRE national director, Daniel Dragicevich.
Stating there is “no substitute” for a properly managed auction process, particularly in a hot market, Ray White holds a strong history of auction transactions. Last December saw its record-setting $37m sale at auction of the Tennyson Hotel, along with the Figtree Hotel, posting a very tight yield around five per cent for its $5.375m sale price. Ray White’s Commercial Property division repeated a complete clearance at its auction in March of this year.
Asia-Pacific director Andrew Jolliffe says they are confident about the regional-theme auction, given the trend toward regional hot-spots in growing economies, as hospitality parties seek better yields than are possible in the capitals.
“Fundamentally, the success of an auction process is heavily predicated by market buoyancy, auction process history and the quality of asset being brought to market, and it is the amalgam of these key factors that gives us confidence in relation to our latest in-house auction day.”
The Belmore Hotel, Unanderra Hotel and George IV Hotel will be auctioned at Ray White offices, at 135 King St, Sydney, 10am Wednesday 31 May.