John Feros’ JDA Hotels has been tempted to market with its newly-acquired top-100 Tennyson Hotel.
Just 14 months after snapping up the asset for around $27 million, JDA has re-listed the Tennyson with high expectations for a hot market especially starved of top-ranking gaming pubs.
Occupying a 1,400 m² block, the imposing two-storey structure – one of a collection* of Sydney pubs designed by renowned architect Sidney Warden in the ‘Interwar Functionalist’ style – is in need of an upgrade, and has just received approval for a DA for the overhaul of the ground floor, designed by hospitality specialist Paul Kelly.
JDA recently received a bid to pass on the Hotel prior to its refurbishment, and another to utilise the so-far undeveloped space at the rear. After nearly going ahead with a deal, Feros decided instead to test the market with an open sale campaign.
“In addition to the unsolicited offer we received, a significant national serviced apartment operator has also made an approach to lease serviced apartments, should they be built on surplus land at the back of the property,” reports Feros.
He engaged Ray White’s Asia-Pacific director Andrew Jolliffe, who notes the rarity of comparable assets changing hands, and suggested a good old-fashioned public auction.
“Only a very small number of Top 100 gaming hotels have changed hands over the past few years, such is the vice-like grip the ever-diminishing number of consolidating ownership bodies hold on this particular asset class.”
The Mascot area is experiencing major growth, including the $500m redevelopment of Eastlakes Shopping Centre by Crown Group, and $250m Mascot Central precinct by Mirvac. Sydney airport and related services reported the busiest year on record, marshalling the bulk of the 8 million visitors to Australia.
The Hotel’s IM shows it is already doing over $8m in annual receipts, and has all the hallmarks of a Top 50 pub, but Jolliffe says it is a broad business with upside in several arenas.
“In addition, the Tennyson Hotel sale prescribes an opportunity to acquire a business operating accommodation, bars, food and a drive-through bottle shop.
“A further compelling feature is the size of the land holding, and the potential for further development in a corridor of Sydney that is experiencing approximately $1bn worth of material development projects.”
The Tennyson Hotel will be auctioned in the CBD offices of Ray White on 1 December.
*The Interwar Functionalist style was a variation on the Art Deco of the 1930s. Examples designed by Sidney Warden include Hotel Broadway, Mascot Inn, Henson Park, Robin Hood, Old Clare, and Charring Cross Hotel.