Singo and Dixon’s Australian Pub Fund is one step closer to exit with the listing of Marrickville’s Vic on the Park in a freehold-starved Sydney market.
Occupying a 1,247sqm block on a prominent corner opposite Enmore Park, the former The Vic Enmore was purchased by Australian Pub Fund (APF) and operational arm Riversdale in 2012 for around $7m.
The pub was at the time increasingly out of step with the burgeoning inner west population, and under the guidance of Riversdale CEO Paddy Coughlan and business partner Rodney ‘Ned’ Kelly it was overhauled and transformed into a thriving local, championing dog-friendly and live music, and new moniker Vic on the Park.
APF is the $100m pub fund by business celebrities John Singleton, Geoff Dixon and Mark Carnegie, which built a portfolio through Riversdale based on buying pubs in the best areas where they believed they could execute upside and increase value.
APF began divesting late 2016 and has been executing a teasing sell-down to optimise results in a red-hot market, thus far transacting the Peakhurst Inn, Bristol Arms and Como Hotel, then the Toxteth, then the Marlborough, then Darlinghurst’s Kinselas, all for big appreciations on the purchase prices.
Based on current figures and the pressure on yields for Sydney freeholds, the Vic on the Park could see a sale price in the mid-20s.
The mixed business of the Vic is expected to benefit from continued demand for inner city residences that has seen the development of the 18-Ha former industrial area surrounding it become the Victoria Road Precinct, heralding over 1,000 new dwellings.
Director Matthew Beach says the sell-down is part of APF’s plan to recycle equity.
“We are by nature and in practise, a private equity fund; and as such it is incumbent upon us as the fund’s custodians to manage assets in and out of our property portfolios when appropriate.”
APF have engaged Ray White and CBRE to market the Vic, who note the “rare and attractive” nature of a big-earning freehold on the city fringe.
“Stapled to the underwritten nature of the commercial property value, is the investor magnetism proffered by the hotel’s unmistakably robust cash flow, which has been a key component of the business’ complexion for many, many years,” offers Ray White Asia-Pacific director Andrew Jolliffe.
The gentrification of the area has driven up both quality of offering and land prices, and CBRE national director Daniel Dragicevich says the thriving pub is well placed to take advantage of its surrounds.
“Sydney’s Inner West has enjoyed the benefit of property value augmentation over the past decade, and will now begin to see the benefit of considerable State Government-funded investment into proximate infrastructure projects.”
Sale of the Vic will see APF’s portfolio down to just three assets – the Unity Hall in Balmain, and the Exchange and Elephant Hotels in Brisbane. The group has not yet advised on plans for these, but they will likely meet the same fate. The (Stock) Exchange was Brisbane’s largest-ever sale at the time, for circa $35m.
The Vic on the park will be sold via Expressions of Interest, concluding Thursday 28 September.
