Ending more than a century under stewardship of the Whelan family, the large-format Strathfield Hotel has sold for around $80 million to Sam Arnaout’s Iris Capital.
The three-level pub was built in 1918 after WWI by John Whelan, courtesy of a windfall betting on a cargo of Scotch whisky thought to have been lost at sea.
Occupying a sizeable 2,067sqm corner site adjacent to Strathfield train station, the Federation-style Hotel counts two large bar areas, gaming room with 30 machines, 2am liquor licence, bistro, bottleshop, and 25 accommodation rooms upstairs.
Significantly, it was also being offered with approved plans for a mixed-use development to be built at the rear, behind the historic pub. This would comprise 60 apartments, 14 additional hotel rooms, commercial and retail space.
“We are particularly excited about this purchase given not only the privilege to take stewardship from the highly regarded Whelan family after 100 years of ownership, but also because my own family share such an affinity with the hotel and area,” offered Sam Arnaout, who has made a specialty of high-end developments with and around existing pubs.
Iris Capital has become a $5bn pub, hotel and development empire, boasting recent projects such as Newcastle’s massive East End development, and portfolio that includes institutions such as Manly’s The Steyne and the Hunters Hill Hotel.
After 104 years in the family’s hands, Brian Whelan ponders that they are all today thinking “with fond sentiment” about the many that have worked and lived the old girl.
“Generations of the Whelan family have thoroughly enjoyed their time associated with this grand hotel, and it is with our best wishes to Sam and his family that we collectively pass the baton for the beginning of his prosperous journey,” he said.
The family patriarch furthered that they thought Iris the ideal choice for their pub, being “best placed to ensure the hotel’s maximisation and longevity as a landmark upon the Strathfield landscape”.
Hitting a hot market in May, the Hotel reported annual revenues north of $10 million across departments, with high margins.
The sale price now represents a yield figure of around five per cent, which reflects the recent upward pressure on valuations and premium typically seen on pubs with clear potential.
HTL Property’s Dan Dragicervich suggests market interest is “piqued” for assets of this kind with “optionality for further enhancement”.
On the tails of sale of Taphouse Group’s Port Macquarie Hotel after 12 years for $57 million, HTL’s Andrew Jolliffe describes the Whelans’ tenure as an “extraordinary time at the helm”.
