Iris has executed the biggest sale of the year in the final weeks of 2020, taking the Ryan family’s long-held Narwee Hotel in Sydney’s south.
The Narwee Hotel is a multi-storey suburban local on a big 3,370sqm block immediately opposite the Narwee Train Station, with a 24-hour licence.
Currently ranked #137 on the Liquor & Gaming list of NSW pubs, with 30 machines, it is surrounded by Top-50 and Top-100-ranked venues, and blessed with three-hour weekend gaming shutdown. Marketing literature poses it will likely become a regular Top-50 business following an on-trend renovation of the gaming room.
Beyond its operational upside, the large block is underutilised. An approved flexible development is already in place, with the B2-zoned site enjoying a 27-metre height limit, FSR ratio of 4:1 and 53 metres of street frontage, potentially allowing 154 residential apartments and retail strata above a reduced pub footprint.
There is also possibility of an even larger mixed-use retail, commercial and residential development through acquisition and amalgamation of an adjoining site.
Des Ryan has enjoyed a prominent career as a publican including serving time in the ranks of the AHA. The Ryan family has held title to a few pubs and to Narwee’s institutional watering hole for decades.
“I’m delighted to have purchased the Narwee Hotel from the Ryan family, and recognize the significance of selling a business having owned and operated it since 1987,” offered Iris’ Sam Arnaout.
“The sale process was clinical, and the impressive presentation and positioning of the asset satisfied not only our key investment criteria, but also met a geographical objective we held for that part of Sydney.”
Making up for lost time in 2020, some of the industry’s biggest names have been dominating most recent acquisitions, as seen in Merivale’s purchase of The DOG, Redcape’s purchase of the Gladstone, and Iris’ very recent $180 million purchase of the Ibis collection.
The price achieved for the Narwee, which sources say was around $45 million, makes it the largest nationally for 2020 following Monarch’s $43 million divestment of the Macquarie Tavern to the De Angelis family in August, also through HTL.
The sale campaign saw a shortlist of parties with both the capacity and intent to purchase at the specified price point produced by HTL Property’s Andrew Jolliffe, Dan Dragicevich and Sam Handy, who are pleased to see the year winding up with a bounce.
“The sale price achieved pays deference to the nature of the opportunity and is justified given the scarcity of large-format Top-150 gaming hotels that also enjoy strong food, beverage, accommodation and alternative use value,” says Dragicevich.
“While it is rewarding to have the top two sales, it is more important for the industry to have rebounded so prominently following the challenges visited upon it this year.”
A beneficial mix of a stable legislative environment, record low interest rates, improved debt liquidity and availability of capital has underpinned demand driving freehold going concern gaming pub yields down to 7-7.5 per cent over the last 12 months. HTL reports the Narwee Hotel continues the national average of one hotel sold each week this calendar year.
“Transaction volumes are operating nationally at around 70 per cent of those achieved during the same period last year, however the cadence for activity has quickened demonstrably over the past eight weeks,” offers Jolliffe.
