Universal Hotels has exchanged its thumping Newtown Hotel for the iconic Lord Roberts in Darlinghurst, in a deal valued at around $20 million.
The Newtown Hotel resides on a high exposure 700+sqm corner of the bustling King Street retail and entertainment strip, close to Newtown Station and the University of Sydney.
The multi-level building caters for up to 720 people, spanning over 1,500sqm of trading space. Ground level features a spacious public bar that spills onto the street, gaming room with 10 machines, pool room, an all-weather beer garden and an unused kitchen.
On the first floor is a bar, commercial kitchen and large dining space, and a popular balcony overlooking King Street. The top floor has additional function spaces.
Universal picked up the leasehold for circa $5.5 million in 2021 from Chris Morris’ Colonial Leisure Group, which had bought the operation in early 2016.
Freehold owners on the property are a private Greek family that have held it for over 30 years, and the Kospetas’ family-run Universal expressed interest in trying to purchase the title.
The group holds a portfolio of fifteen hotels, which includes five leaseholds, and has been moving toward owning the bricks and mortar of all its pubs.
Management of its collection has come to see several sales and acquisitions, with Universal taking over the Palace Hotel in Haymarket while leasing out the Bat & Ball in Redfern, and purchasing the strata title of the Evening Star in Surry Hills from Barham Hamarashid while selling back to him the lease of The Mill, in Bondi.
Unable to secure the deeds on the Newtown, the group put the operation to market last August through JLL Hotels’ Kate MacDonald and Greg Jeloudev.
The lease had 17 years remaining and reported weekly revenue north of $120K, with 71 per cent derived from high GP bar sales.
During the sale process, Sue Cameron – owner of Darlinghurst’s Lord Roberts Hotel – expressed interest, and in time Universal agreed to a deal.
“The Lord Roberts is a well-known Darlinghurst institution, and we appreciate its reputation,” says CEO Harris Kospetas.
“Universal Hotels also has a long-standing relationship with the Darlinghurst community, which we believe will be of value to the venue.”
Kospetas offers they are taking any changes slow, but disclosed that the Lord’s entertainment offering is under consideration and will be revised, to “focus on an inclusive and vibrant direction”, and a new menu has already been created, offering pub classics and elevated share plates.
“We’ll take the time to settle into the venue and consult with the local community,” Kospetas continued.
“We plan to reinstate the heritage features of the property, but will not make too many changes.”
Generally known as the ‘Lord Bob’, the Lord Roberts was established circa 1870 as the Shannon Hotel.
Long-time publican Sue Cameron listed the freehold going concern in May of 2022, and the following month news emerged of a sale to a new entrant to the industry. But after a protracted settlement period the deal subsequently failed.
Universal had been interested in the 150-year-old pub at the time, and was happy to resume the conversation, now incorporating talk of the Newtown lease.
“As the long-term custodian of ‘The Lord’ I’ve felt very privileged to have served the very eclectic community of East Sydney; plenty of colourful characters have called this pub their local,” said Cameron of the sale.
Agents pose that the easing economic climate is likely to further lift the appeal of strong leasehold operations.
“These high cash flow businesses with strong earnings will always be highly sought-after by market participants,” says MacDonald.
“As investment metrics start to compress with rate reductions, we will see leasehold opportunities continue to gain interest from portfolio owners and market entrants alike.”
