In a year peppered by top-dollar transactions, Iris Group has executed one of the biggest gaming pub sales with the Oxford Hotel.
The landmark Drummoyne hotel and adjacent retail property have sold for around $34 million in a clear indication the hot market continues to sizzle.
Speaking to PubTIC, Iris CEO Sam Arnaout said conditions were right for them to part with the asset.
“We are continually assessing market conditions, and identified a quality asset such as the Oxford would generate a premium in this climate”.
Iris undertook a circa $4 million makeover of the high-profile corner site, adding an impressive beer garden, and underground parking. The combined 974 m² site also boasts height development potential that could allow for a rooftop bar with city views.
With 30 EGMs in a renovated layout, the hotel has climbed 30 places on the OLGR list of top gaming venues to be inside the top 100.
The sale was negotiated for Iris by CBRE Hotels’ national director Daniel Dragicevich, and JLL Hotels’ national director John Musca.
Even in light of so many big-dollar transactions through 2015, spurred on by the attractive spread between capitalisation and finance rates, Dragicevich says the Oxford is a special performer.
“The Oxford Hotel is a true AAA grade diversified hotel, and the result achieved reflects the scarcity of such quality assets in the Sydney metro market.
“[It] is a rare example of a strong gaming-centric venue that also has significant and growing contributions from on-premise bar and food revenues, which is a unique balance reserved for hotels with limited competition in high-density precincts.
Musca adds that top-ranking gaming sales this year have reflected pricing that was less about yield compression as about asset supply constraints and earnings growth potential.
For more on 2015 pub transactions, see PubTIC’s latest magazine for the ultimate pub real estate run-down. Click here to view online.
