ROYAL HOTEL SUNBURY INVESTMENT WITH 51-YEAR LEASE TO ALH

In On the Market by Clyde Mooney

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The freehold interest of the Royal Hotel in Sunbury has come to market, with a coveted lease to Australia’s biggest publican, ALH, and land bank just forty kilometres from the CBD.

The Royal Hotel is triple-net leased to Australian Leisure & Hospitality (ALH) for 51 years including options, drawing annual rent around $367k, with built-in CPI increases, plus a market review in 2018.

The Hotel occupies a well-positioned 1,940sqm site just 100 metres from Sunbury train station, with 31 gaming machines.

Sales in the past year have seen Victoria lead the charge in sharpening yields, largely in light of high demand for commercial real estate and tightly-held assets*. The recent sale of the KFC in Sunbury reflected a 3.6 per cent yield.

The private investor has commissioned JLL Hotels’ Mat George and Alex Richardson to market the property and opportunity, likely to fetch circa $8m at current returns.

“While investors will enjoy the strength of an ALH covenant and 51-year lease term, the asset enjoys substantial long-term land banking qualities in an explosive growth corridor,” notes Richardson.

“With the population expected to grow by 124 per cent by 2041 to 85,288, the area is booming and Sunbury will be the major commercial centre for five outer suburbs with potential for a further 23,000+ housing lots.”

Sale of the Royal Sunbury is via Public Tender, closing Thursday, 2 November.

 

 

 

*For more on commercial real estate spreads across Australia, see the latest edition of PubTIC magazine.

Royal Hotel, Sunbury