Chris Morris’ Colonial Leisure Group has made its much-anticipated entry into NSW, grabbing Keystone’s Newtown Hotel amid a “natural evolution” of the pub market.
Reshuffling its portfolio in recent years, Colonial Leisure Group (CLG) has sold a number of pubs, acquired a Townsville Casino, and divested freeholds to focus on hospitality business opportunities. It currently owns or manages 19 venues, in Victoria, Western Australia, Queensland and overseas.
Speaking with PubTIC, CLG national general manager Lawrence Dowd says the leasehold purchase makes the perfect platform for a move into the biggest hospitality state.
“This is a first toe into NSW,” said Dowd. “[The Newtown] wasn’t really for sale, but it ticked a lot of boxes for us: it’s the right area – we really like Newtown – and it’s a similar demographic to some of our other pubs, like Bimbo Deluxe in Fitzroy.
“We know this type of area and business.”
CLG’s press release on Wednesday alluded to Newtown Hotel becoming a Sydney base for the company’s Colonial Brewing Co brand, and Dowd tipped changes to the Hotel including the beer selection.
“We’ll look at the bev offering – we’d be silly not to have a mix of brands, and maybe focus on bit more on the craft agenda – as well as the food. They are the two main drivers for our business.”
The transaction was managed by JLL Hotels national director John Musca, who notes its significance in the increasingly competitive Sydney pub landscape.
“The bar has noticeably raised in Sydney over the past three years for on-premise hotel offers, mirroring the small bar proposition-led approach but introducing scalability, so interest in acquiring leasehold opportunities is a natural evolution of that.”
Asked if CLG has its eye on further Sydney propositions, Dowd acknowledged the challenge of setting up in yet another State.
“Small steps first, until we bed down the new town.
“There are lots of things happening in pubs in all states. A lot of opportunities come across our desk, and we review each case by case on its merits, and if we feel it is the right fit us and we could add value, then we act.”
The Keystone Group purchased the three-level 720-capacity hotel in 2010 and spent over 12 months renovating it, including adding a weather-proof courtyard with retractable awnings, a mini-cinema on the top floor, and restoring the historic street-view balcony, which involved significant structural work to cantilever the balcony to comply with modern code requirements.
A release from Keystone said the unexpected sale came amid “favourable market conditions” and frees capital to allow better utilisation of some of their other 20 venues.
“We are pleased to confirm the sale of The Newtown Hotel to Colonial Leisure Group,” said Keystone managing director John Duncan.
“It has been a very successful venue for us, and we know it will continue to trade strongly in an exciting suburb. For The Keystone Group, the sale will allow us to continue to focus on building and expanding our core brands across our bar and restaurant portfolio.”
The sale price of the transaction was not revealed. Handover is expected to finalise late March.
Former Computershare mogul Chris Morris established CLG in 2008.