The Thomas family has sold another of its prize assets, seeing MA Financial’s Redcape Hotel Fund acquire the large format Entrance Social Club, on the NSW Central Coast.
Formerly known as the Entrance Hotel, the venue is a stunning seaside venue on a cornerstone 4,609sqm site at The Entrance. Andrew and his father ‘Taffy’ Thomas have owned and operated since 1990.
In recent years it saw an extensive renovation, ushering in an instalment of Taffy’s Sport Bar, as well as Mrs May bistro and bar, alongside a gaming room with 26 machines and 13 accommodation rooms, generating diversified revenue across departments averaging more than $220k weekly.
While historically weighted toward the heavily populated growth corridor of western Sydney, in recent times Redcape has divested a number of its NSW assets, such as sale of the South Terrace Hotel in Bankstown to Oscars in April, and turned its attentions to south-east Queensland, picking up prime venues such as the Plough Inn, from Kickon Group, last October.
Redcape MD Chris Unger says this was “a deliberate move to increase our presence in that high growth and undervalued area” where the group identified comparable dynamics to those seen for years in western Sydney, and that the interest in SEQ “will continue”.
Redcape has also recently launched a new fund, established in New Zealand.
Recognising its strong revenue mix and underlying land value in a pub-loving coastal community, the group moved quickly on the Entrance, sources relaying they paid $36 million for “exactly the kind of pub” they seek, in an extension of the existing strategy and an exercise in future-proofing.
“Today, as metropolitan Sydney sprawls beyond the historical catchment, areas like the Central Coast are experiencing population growth, have a limited supply of assets and the residents are generationally drawn to pubs as a social and entertainment choice,” Unger told PubTIC.
“It makes great strategic sense for us to diversify our portfolio further and get a toehold in such an area.
“This diversification is an important strategic priority as we continue to build on our resilience as a business.”
The sale by the Thomas family follows their recent divestment of the iconic The Oaks in Neutral Bay, which came to market with accordant expectations as one of the country’s best-known pubs, with the recent high-value sale to Gallagher Hotels.
The Thomas’ engaged HTL Property’s Dan Dragicevich and Andrew Jolliffe for an invitation-only off-market four-week sale process at The Entrance, offering a rare opportunity that prompted plenty of interest.
“Seaside assets that possess the enduring real estate and trading fundamentals of the Entrance Social Club are notoriously tightly held,” says Dragicevich.
“When they do arise, they are highly sought after, as evidenced by the interest generated during the competitive sales process, and the quality and quantity of offers received.”
As the financial year looks at north of $2bn in hotel sales nationally, the market for traditional hotels continues its magnetic appeal, largely driven by prime landholdings and the protections provided by the higher barriers to entry, such that “investors are finding comfort in the hard asset backed nature of what is in many respects a small ticket retail business model” says Jolliffe.
