Sydney hotelier Andrew Lazarus has bought Shoal Bay’s Country Club Hotel and adjoining assets, adding to his collection of “amazing upside” Hunter region pubs.
Listed by long-time owners the McPhee family in August, the Country Club forms part of the 158-apartment Ramada Hotel. The asset purchase included around 120 metres of beachfront retail under the Ramada.
Speaking to PubTIC, Lazarus says having two pubs in the area now allows him benefits in the businesses and his lifestyle.
“I’ve been really pleased with the investment at Newcastle. We have economies of scale in the area now, management-wise, and I can focus in the next 20 years on having the lifestyle and planning for retirement all in one.
“I love the Shoal Bay area. I’ve gone there for holidays, and now bought a house too.”
Shoal Bay is around three hours’ drive out of Sydney, around 60 kilometres north-east of Lazarus’ Exchange Hotel in Hamilton, on the outskirts of Newcastle, which he bought in June from Lantern Group.
Offering unobstructed beach views, the Country Club was built in the 50s by the Randall family, and has now been owned for nearly 30 years by the family company of logistic magnate Jay McPhee. The asset comprises around 5,000 m² of hospitality space, which Lazarus says he is eager to explore.
The property was marketed by CBRE Hotels national director Daniel Dragicevich and manager Ben McDonald, who noted in their announcement the extra-rarity of this ocean-side pub changing hands, and now report the McPhees are pleased with the result.
“Jay McPhee made special mention of his desire to ‘pass the torch’ to an operator who would do the asset justice and believes that Mr Lazarus will do just that,” said McDonald.
Lazarus admits the higher yields available in regional assets was a drawcard, but the challenge and potential for such a large asset, which hasn’t seen capital expenditure since 2002, is very enticing.
Due to take the keys 28 November, he plans to make hay while summer shines and plan for a total overhaul off-season.
“The Country Club has amazing upside,” he said. “I see it as similar to the likes of the Watson’s Bay or Newport Arms – generational holds, where a new operator comes in with new eyes and there’s a dramatic change.
“It trades at full capacity during summer. Next winter we’ll look to reposition tenancies, possibly some joint ventures. Most are closed much of the year; I have major plans to reactivate them. The goal is to create a bit of a destination in the precinct, by having enough different products.
“And I’ll be spending at least half my time based up here … it’s a beautiful part of the world.”
A number of highly desirable coastal hotels have transacted this year, with Arthur Laundy leading the charge, buying several in the past year, most recently the Swansea in Lake Macquarie.
Dragicevich reports over 60 enquiries were received for the Country Club, further indicating their increasing desirability.
“This ongoing competition for assets and the weight of metropolitan capital targeting coastal regions continues to drive successful outcomes for hotel owners.”