Another ALH plot of gold has come to market, with a private investor offering up the Austral Hotel and adjoining Dan Murphy’s Liquor Barn.
Occupying 4,360 m² in the heart of Mackay, the site boasts an exceptionally long 70-year lease to Woolworths to retail liquor and its majority-owned Australian Leisure & Hospitality (ALH) to operate the Austral Hotel.
Ownership of such freeholds has attracted stiff competition in recent years, with yields regularly below six per cent for ALH-tenanted properties. Those including a Dan Murphy’s often considerably sharper still*.
Conditions continue to shine in pub asset acquisition, leading to an increasing disparity between the number of buyers and opportunities.
The Mackay property is being marketed by JLL Hotels national director John Musca, who says these freeholds make a hard-to-resist combination.
“The latest interest rate reduction, and an undersupply of the best credit-rated investment opportunities nationally, coupled with the surety of long term annuity income streams from arguably the best tenancy covenants in the country, are together extremely attractive.”
As with all such ALH and Woolworths-tenanted leases, annual rental increases are built into the agreement alongside generous renewal options. Price expectation for the Mackay block is around $25 million.
The Expressions of Interest campaign for the Austral Hotel and Dan Murphy’s Mackay closes Tuesday, 7 June, 2016.
*Recent Dan Murphy’s asset transactions have seen highly competitive yields at Broadmeadows (5.63%), Richmond (5.36%), Rosebud (4.81%), Queanbeyan (4.75%), Gladesville (4.59%), Pakenham (4.17%)