Byron Bay’s juggernaut ‘Top Pub’ has hit the market and tight investor yields could see it fetch over $70 million.
The Beach Hotel is possibly Australia’s ultimate beach hotel, located on 4,585 m² offering ring-side views of Byron Bay’s picturesque Main Beach.
It was built in 1990 by John Cornell at a cost of around $9 million, with proceeds from the blockbuster Crocodile Dundee, which he co-wrote with Paul Hogan.
Cornell (aka Strop) sold the hotel, which has become known locally as the “Top Pub”, for $65 million in 2007 to current owner and vendor, Melbourne businessman and restauranteur Max Twigg.
The Hotel is leased to fellow Melbourne identity and pub industry veteran John van Haandel, who last year sold his freehold the Prince of Wales Hotel to Chinese developer Pub Li City for a lucrative $45 million. The van Haandel lease is until mid-2017, plus two ten-year options. Annual rental income is around $4.2 million.
Comparable investor yields at or below six per cent could see a sale price in excess of $70 million.
Hotel facilities include multiple bars, a bistro with alfresco dining area, beer garden, a walk-in bottleshop, gaming room, 25 accommodation rooms, pool with heated spa and conference facilities. Its monopoly beachside location ensure it sees a large share of the 1.37 million visitors that come to Byron Bay throughout each year.
Twigg has engaged both Ray White and CBRE Hotels as agents, marketing the asset out of both Sydney and Brisbane offices.
Both agencies have managed sales of similar big-earning large-format freeholds in recent times, and expect to field plenty of interest from within the industry and from hungry overseas capital.
“The national hotel investment market has seen a huge spike in values in the last couple of years with the continued low borrowing rate environment directly linking to capitalisation rates – especially for truly iconic properties such as the Beach Hotel, Byron Bay,” said CBRE national director, Daniel Dragicevich.
“Sales of the Prince of Wales in St Kilda, Melbourne and the Golden Sheaf Hotel in Double Bay, Sydney saw competition generated across various purchaser profiles, and we expect a similar market response for the irreplaceable Beach Hotel.”
Ray White’s Asia-Pacific director Andrew Jolliffe expressed similar comparisons to transactions on landmark properties.
“We’ve recently managed the successful sale of beachfront iconic hotel properties including the Newport Arms, Northies on Cronulla Beach and the Crowne Plaza at Terrigal, and the market depth exhibited internationally when we marketed those three properties is emblematic of what our expectation is in relation to this most revered of Australian hotel property opportunities,” concluded Jolliffe.
The freehold asset is being marketed via Expressions of Interest, closing Wednesday 6 July.
