‘CLOEY’ HOTEL TO TEST WATERS IN TIME FOR SUMMER

The sky is the limit as Eastern Suburbs pub royalty comes to market, with Iris testing the waters for its beachside beauty, the Clovelly Hotel.

Sam Arnaout’s Iris Capital acquired the Hotel in 2008 and in 2012 performed a major redevelopment and refurbishment of both the site and structure. The new offering included multiple bars and function areas, and an impressive beer garden with massive LED TV screen.

The renovation drew critical acclaim, earning the historic pub several industry awards and a potent share of the thousands of visitors to the beach precinct each weekend. Its location and ocean views of Clovelly Beach make it one of the ‘irreplaceable’ Sydney pubs.

The Clovelly Hotel has stood sentry on the eastern hill for over 150 years, and enjoys long association with local institutions. It is being marketed by Ray White Asia-Pacific director Andrew Jolliffe, and CBRE Hotels national director Daniel Dragicevich, who both speak of its institution and “folklore” status.

“The Cloey really does embody so many of the great things about the Australian pub culture; ranging from the very focal point around which a whole community orbits, to an almost inimitable gathering place in the social history of surf lifesaving in the eastern beaches area, all codes of football and horse racing,” offered Jolliffe.

The Expressions of Interest campaign has set no price expectation, but sales of comparable properties in recent years, such as the Coogee Pavilion and Hotel Bondi, have seen top-dollar paid for opportunity beyond consideration of the going concern business.

Operators finding their way into these blue-chip properties include Justin Hemmes and Kim Maloney OAM (respectively, above), Chris Cheung at Coogee Bay Hotel, and the Arthur Laundy and Fraser Short partnership at Watson’s Bay.

Dragicevich says the “veritable hotel industry hall of fame roll call” will likely continue with the next owner of the Clovelly.

“The Cloey is such a complete package,” he explains. “Sitting proudly upon a high point on Clovelly Rd and with views of the Pacific Ocean, the impressive building is attractively presented and its proximate relationship to Clovelly, Bronte and Coogee beaches means that an element of the $9.1M in annual sales is notionally underwritten by the sheer weight and regularity of visitors to the area.”

While Sam Arnaout declined to comment on the sale, his tendency toward acquisition and development mean business is done at the Clovelly, and it may take a different kind of operator to take it further.

“[Arnaout] has owned the property for almost a decade, and has historically shown good portfolio hygiene practices by cycling his hotels in and out of the stable dependent upon where his focus and related strategic objectives lay at a given point in time,” says Dragicevich.

There is reportedly upside in most revenue departments for a “new set of eyes” to the operation, but Jolliffe suggests the greatest potential is likely in a revised accommodation offering, as seen at the Hotel Bondi and Watson’s Bay Boutique Hotel.

Australia’s overnight-stay hotel industry is projected to grow to $127bn annually by 2020, and has already surpassed the mining sector as a national economic resource.

“In the past year Australia, largely due to the fantastic work Tourism Australia have done, has enjoyed its best year of tourism statistics, with 8 million visitors recorded as having travelled here,” advised Jolliffe.

“Separately, there were 250 million domestic market-generated room nights, pointing to the increase in shorter, more localised stay options holding favour.”

The EOI campaign begins this Saturday, and will close Wednesday, 23 November.