Fresh from its recent record-breaking acquisition of Hotel Steyne, Iris Capital has listed for sale the Hunter Valley’s Kearsley Hotel.
Beyond $60-plus million buys in one of Sydney’s highly prized precincts, Iris has been steadily building a formidable presence in Newcastle, and in the Hunter Valley, seen in purchase of Hungerford Hill Estate in Polkolbin, Dalwood Estate in Dalwood, and most recently, Peden’s Hotel in Cessnock.
Kearsley is just east of Cessnock, the gateway to the Hunter. The landmark pub occupies a generous 2,023sqm corner block in the heart of town, offering a bar, bistro, beer garden and 14 pub-style accommodation rooms, with scope to easily reinstate three additional rooms.
Iris purchased the Hotel with a tenant in place and continued a short-term arrangement.
Sam Arnaout has now determined the pub is not suited to their needs and put the freehold asset to market – with the option of vacant possession, as allowed in the lease agreement.
“Although we love the pub and the area, this is a non-core asset for us and a more hands-on operator will be best suited to unlock its potential going forward,” says the Iris CEO.
“Since I have been going there the region has exploded in popularity and is still one of the fastest growing places in the state.”
The passive freehold is currently generating $52k annually on a triple-net lease and likely to fetch up to $1 million, but HTL Property’s Blake Edwards and Deane Moore of Moore & Moore Real Estate anticipate no shortage of operators vying for the keys in the burgeoning region.
“With an international standard year-long event schedule operating in the Hunter Valley, there exists enormous demand for accommodation and the Valley is often booked out,” notes Edwards. “Consequently, there’s is a real opportunity to improve the accommodation offering and capture some of this excess demand.”
Newcastle-based Moore & Moore note the Kearsley’s standing in the arena.
“In terms of bang for buck, the asset represents one of the best value for money investments presently available in regional NSW, and one of the lowest entry points into the Hunter Valley Hotel market currently on offer,” suggest Deane Moore.
The Kearsley Hotel freehold or vacant possession is being sold via Expressions of Interest, closing Wednesday 29 May.