Charter Hall’s Long WALE has secured the deeds to ALH’s popular Parap Tavern in Darwin, in a $19.7 million deal and continued show of confidence in the sector.
Established in 1937, the Tavern is a community favourite, known for its high-quality food, beverage and retail liquor business, and regularly ranked Top 10 in the Territory for gaming.
Terry Dowling and family have owned the well-known hotel for over 70 years. In 2014 they leased the pub and bottleshop to ALH Group for circa $9 million.
The ASX-listed Long WALE Investment Partnership (LWIP) (ASX:CLW) managed by Charter Hall sports a portfolio of around 60 retail and hospitality properties throughout Australia.
Purchase of the Parap reportedly represents a freehold yield of 5.65 per cent and is a strong indicator of LWIP’s intentions in hospitality real estate. ALH, majority-owned by Woolworths, holds a lease on the Tavern until 2084, including options.
The divestment was executed by HTL Property’s Brent McCarthy and Glenn Price, who committed to “running a process to identify an applicable suitor for an A-grade property asset backed by a robust covenant such as that which ALH promotes,” reports McCarthy.
LWIP’s passive investment follows those of HPI in March, acquiring the freeholds of the Malouf’s Gregory Hills Hotel for $40 million and Monash’s Acacia Ridge Hotel for $20 million.
“We are flagging the re-emergence of strong capital inflows towards investment grade hospitality assets of both traditional pubs and accommodation-based hospitality genres,” notes HTL MD Andrew Jolliffe.
LWIP securities were on a relative high of $5.72 in early March before crashing 38.29 per cent later in the month as pubs where forced shut nationally. It closed today at $5.17, having gradually reclaimed 90 per cent of its pre-pandemic value.
