John Azar’s Good Beer Group has divested another north shore asset, selling the prominent Union Hotel to Ashton Waugh’s Watering Hole Hotels.
Good Beer Group holds a stable of predominantly CBD-focused pubs, including the Edinburgh Castle Hotel, Coronation Hotel and Surry Hills’ KB Hotel. Having sold the Commodore Hotel to Glenn Piper mid-2023, Good Beer Group has now exited North Sydney with sale of the Union.
“We’re delighted to acquire this significant Sydney freehold hotel, and in doing so, continue to deliberately expand our group into both metro and regional areas,” says Waugh.
Occupying a prominent 784sqm lot on arterial Pacific Highway, the Union spans two levels, amassing over 1,200sqm of trading footprint. It provides gaming, operating 26 machines, and holds a midnight hotel licence, generating reported annual revenue of more than $5.6 million.
Azar and co bought the Union from Gallagher Hotels in early 2021. In 2023 the group tested the market, at the same time as its Harold Park Hotel, which has now been refreshed and is back on the market.
The Union now comes bearing blue sky courtesy of a new Paul Kelly-designed gaming room, and has potential to do more with the upstairs function space.
The pub is indicative of a style attractive to Waugh, not unlike his Commonwealth Hotel – The Commy – in Newcastle, in its structure and prominence.
Believed to have paid circa $21 million for the Union, the new acquisition takes Watering Hole to fifteen venues across New South Wales.
North Sydney CBD is undergoing major works and unprecedented growth, seen in government investment and planned infrastructure, along with private developments aiming to accommodate an additional 6K residents and 20K workers over the coming decade.
The off-market transaction was through HTL Property’s Dan Dragicevich, Andrew Jolliffe and Sam Handy, who speak of an increase in buyer enquiries on the kind of tangible assets hotels represent, ahead of anticipated good news from the Reserve Bank.
“Expected interest rate cuts generally result in buoyant on-premise trade and resultant yield compression,” offers Dragicevich.
“Assets such as the Union Hotel, with such commanding real estate attributes, also provide the comfort of a high asset floor, which hasn’t proven available in the equity markets of late.”
Acknowledging the stress international political turmoil is placing on equity and other markets, agents say the “considered and better view” amongst investors is toward structured financial models based in hard-yielding property investments.
“The macro investment fundamentals for an incoming hotelier are incredibly attractive, particularly considering there are only seven pubs within the North Sydney CBD servicing this already voluminous and growing local population,” adds Handy.
