INVESTOR BUYS BIG ALBERT PARK BEACH HOTEL

In Property by Clyde Mooney

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As development fever continues to grip Victoria, the landmark Beach Hotel site, with supermarket, has sold to a Chinese investor for around $18 million.

Famed for its vibrant atmosphere and views of Port Phillip Bay, the Beach Hotel overlooks Albert Park Beach, and features bars and dining rooms, function rooms, bistro, gaming room with 32 EGMs, and upstairs accommodation.

The 1880s-built Hotel occupies 1,713 m² on the corner of Beaconsfield Pde and Victoria Ave, adjoining a 387 m² space on a ten-year lease to Foodworks Supermarket and Liquor Store. A 7-year lease on the Beach Hotel was recently taken on by McKinnon Hotels.

Rental income on the asset amounts to around $758k, and the sale price – reported in the AFR as $18m – represents a tight 4.2 per cent yield.

The popular pub was famously purchased for $7m by Collingwood Football Club, back in 2007, in an effort to diversify its revenue streams and hedge against on-field performance. This proved disastrous, plundering the club’s finances and threatening its survival until the Hotel’s sale in 2013.

The freehold asset, zoned Commercial 1, was listed in early February by well-known hotel broker Terry Board, with Peter Board, and marketed by CBRE Hotels’ Scott Callow and Mark Wizel.

“This substantial beachfront site will offer tremendous future development opportunity, with the security of strong trading operations, which include gaming,” Callow told PubTIC.

The freehold interest was sold with a redevelopment clause that could allow the leases to be terminated at short notice. Around 50 metres’ from the water, the block’s height limit could allow development up to five storeys.

“There was a considerable amount of local and overseas buyer interest,” reports Callow. “The prime corner site, with established hotel and supermarket, provides both income and the potential for future development.”

Callow was unable to comment further on the sale, or the possibility of any development plans by the new owners.