After an impressive 45 years of ownership, Geelong hospitality stalwarts the Burnett family have completed the sale process on their treasured St Lords Hotel.
Former President of AHA Vic, Peter Burnett, established the pub on a high-profile corner in Newtown in 1980, named Lord of the Isles.
The 3,542sqm site is close to Geelong’s city centre and to GMHBA Stadium – one of Victoria’s leading sporting venues, around an hour from the Melbourne CBD.
The large-format hotel features a broad range of facilities, including a sports bar, large family-friendly bistro, gaming lounge with 60 machines, and extensive parking.
After decades operating the pub, the family began their journey to divest in 2019 with sale of a new 20-year lease plus options to Dave Tomsic’s Black Rhino Group.
Having spent time as landlord, they opted to undertake step two in the divestment and offer the title to market, for the first time in over four decades.
The freehold interest has now sold for $12.4 million, representing an impressive yield of 6.5 per cent.
Black Rhino is one of Australia’s largest privately-held hotel operators, keeping a diverse portfolio of 46 venues spanning Victoria, South Australia and Queensland. They are currently paying annual rent at St Lords of around $811K, with fixed three per cent annual increases and total tenure of 70 years.
The unnamed buyer was one of many said to have been drawn to the pub’s investment characteristics, in particular its recognised covenant and the long-term blue-chip lease to the Rhino.
“These characteristics attracted diverse buyer interest throughout the campaign, with the successful purchaser, a Melbourne-based retail investor, valuing the asset comparable to traditional retail investments due to its secure income profile,” says selling agent Will Connolly, of JLL Hotels.
New capital continues to find its way into the pub sector, as St Lords sustains the high-profile sales that came to light in August, being Bells Hotel – sold to Peter Filipovic’s Saxon Group – and Guy Lawson selling his long-held Napier Hotel in Fitzroy after 29 years to industry newcomer Baxter Pickard.
“The St Lords Hotel embodied the highly sought-after investment attributes that have driven significant capital flows into the pub investment sector,” adds Connolly.
