Waratah Hotels has decided to divest the acclaimed Royal on 99 in south-east Queensland to focus on core assets closer to the rest of the collection.
In November 2014 the Royal on Ninety-Nine burned down in a major fire. It didn’t reopen for two years, in late 2016. Toward the end of 2020 it was purchased by Darren Baker’s Waratah Hotel Management.
Known by locals simply as “99” the new purpose-built pub has become a mainstay of the community and a well-rounded business, offering numerous and spacious bars, including a sports bar with TAB, a cocktail lounge, a modern bistro with footpath dining, and updated gaming room with 18 machines.
Noticeably balanced across departments, the Hotel records weekly revenue of around $120k.
The business counts passive income from a Subway tenancy, on an adjoining but separate title. This is currently on a month-to-month lease, but its suggested the tenant could potentially resign a lease or the space could enable an expansion of the gaming room or licensed area.
99 is likely to fetch a sale price of circa $8 million.
Baker reports it has proven a “fantastic” pub for the group, and the reluctant sale comes purely out of logistics.
“Currently, our portfolio is centric to NSW, Townsville and the Brisbane CBD,” notes the Waratah director.
“This leaves 99 as an outlier within our group, which has led to our decision to divest this asset and to re-deploy the surplus funds into other assets closer to our core business operations.”
Mid-2022 the group divested the Tandara Hotel Sarina to Australia’s biggest pub operator, Endeavour, and has again appointed HTL Property’s Glenn Price and Brent McCarthy to manage the latest sale process.
The agents report regional centres such as Roma are being “highly sought” in recent times by pub groups, corporate entities and PE funds, with a gamut of new investors entering the regional market.
“Considered a secure and stable foothold in the Hotel sector, and enjoying limited competition compared to the major cities, regional Queensland continues to be a growth area for trade and the reason pubs are in the crosshairs of numerous investor groups,” says Price.
The freehold going concern of the Royal on 99 is being sold via Expressions of Interest.
