Byron Bay’s legendary Beach Hotel has broken its own sales record, fetching $70 million from sophisticated new investors.
One of Australia’s richest families is backer to the Impact Investment Group, which has expanded slightly beyond its normal investment type with the freehold purchase of the Beach Hotel in the idyllic NSW north coast town of Byron Bay.
Known locally as the ‘Top Pub’, it was built by John Cornell in 1990 for around $9m, using his proceeds of the immensely successful Crocodile Dundee movie, which he co-wrote with Paul Hogan.
Cornell, who played Strop in the iconic Paul Hogan Show, sold the pub in 2007 to former race car driver Max Twigg, the passive freehold and pub business setting a record Australian pub sale figure of $60m.
Impact Investment Group (IIG), led by the Melbourne-based Liberman family, cited by BRW as Australia’s third-richest with an estimated wealth of $2.5bn, is based in a model of allocating capital toward creating “the world we want to live in”, blending financial returns with deep social and environmental impact. It boasts more than $730m in existing and under-construction assets, and counts individuals, families, institutional investors, corporations and foundations amongst its investment partners.
While its portfolio includes examples such as the Chepstowe Wind Farm in Victoria, Gold Cost Surgical hospital and Giant Leap Fund (Australia’s first venture capital fund solely dedicated to investing in impact businesses, launching this year), IIC has to date limited its exposure in hospitality to accommodation projects.
While the sale comes with a long settlement, the Group is already looking to big things at the Beach, predicating bold green and social impact initiatives in the next few years to help regenerate the “heart and soul” of Byron Bay.
“We’re looking forward to settling this transaction in six months’ time. It’s a great hotel, and we’ve already made a lot of progress planning our environmental upgrades and how we’ll work with the operator and locals to deliver real positive impacts for the Byron Bay community,” offered a spokesperson.
The Beach is leased to Melbourne pub industry identity John van Haandel for the next ten years, with a further 10-year option. Rental income from the tenancy is just north of $4.4m annually, with fixed three per cent annual increases.
Occupying 4,585sqm overlooking Byron’s magnificent beach, the Hotel includes 25 accommodation rooms and the passive freehold holds long-term redevelopment opportunities and reversionary value.
The Hotel is modestly placed in the Liquor & Gaming list of NSW venues at #653, and the freehold asset includes both the licence and gaming authorities.
The off-market transaction was brokered by CBRE Hotels’ Daniel Dragicevich and Wayne Bunz, and the $70m price tag represents a very sharp 6.3 per cent return.
“There are very few landmark beachside freehold hotels like this in Australia, both in terms of scale and location,” says Dragicevich.
“The irreplaceable oceanfront site, lease covenant, future development and reconfiguration upside and aspirational nature of the hotel provide a compelling mix for astute investors such as IIG.”
Top Pub Sales in Australia to date
Data provided by Robertson & Robertson, hotel valuations
