As Marly bar is poised expectantly on the market, Riversdale has sold another off-market, with Mitchell Waugh’s Public House Management Group snatching Mitch’s first love, Glebe’s The Toxteth.
Australian Pub Fund (APF) was formed by investors and business celebrities John Singleton, Geoff Dixon and Mark Carnegie with a $300m kitty looking to find returns in the Australian pub market, post-GFC.
APF, in its previous incarnation as Lazard Carnegie Wylie Pub Fund, partnered with Paddy Coughlan and Ned Kelly’s Riversdale Group as operator, and bought Glebe’s faded Toxteth Hotel for just shy of $10 million from the Murphy family.
The group had already purchased Paddington’s Bellevue Hotel, the Peakhurst Inn and Kinselas in Darlinghurst, applying its mantra of a focus on the core business of food & bev at under-performing pubs. The Tox went on to get a smart renovation, relocating the gaming room, installing an upstairs studio for local artists, and an on-trend menu.
Waugh established PHMG in late 2015 with a comparable mandate to move away from gaming-reliant assets to hotels with balanced income streams and ties to the local community.
Coming full circle, Waugh now buys the pub where he began, for a price quoted in the SMH as $21 million.
“The Toxteth Hotel has always held sentimental value, as it was where I got my first taste of the hospitality industry as an enthusiastic 18-year-old working for then owners the Murphy Family,” said Mitchell.
“PHMG looks forward to continuing to build upon the strong relationship they forged with the Glebe community.
“We remain committed to assessing acquisitions opportunities whereby our hospitality strategy can add value to an existing operation and where we believe our brand will enjoy long-term support from the community within which the hotel is located.”
APF had strong inclinations toward an IPO until the changing investor landscape forced them to reconsider options, and instead focus on the portfolio’s profitability.
The near-frantic activity seen in late 2016, embodied by Lantern’s $200-million-dollar sell-down, brought the three investors to decide the time was right for some realisation. Even before rumours were confirmed the Newtown landmark Marlborough Hotel was up for sale, the surprise announcement came of no less than three Riversdale pubs sold just prior to Christmas.
Now, as the Marly’s EOI campaign approaches a close, Ray White’s Andrew Jolliffe has also transacted the sale of the Toxteth. Involved with a number of the Lantern sales, and the recent Peakhurst Inn sale for APF, Jolliffe says the market is not sated.
“What these recent key note sales have illustrated is two-fold, being that A-grade freehold hotel assets are both scarce and keenly sought after, and the appetite from astute property and hospitality investors remains largely unquenched.”