Kieren Barry is selling the leasehold of Billy Barry’s Hotel in North Sydney, offering ‘hard asset’ value for an incoming tenant in a thriving and growing precinct.
Previously known as the Station Hotel, Billy Barry’s is an efficient two-level pub featuring a sports bar, bistro, gaming room with 27 machines, and a function room, with a 2am liquor licence.
It is located across from North Sydney train station, which is the 11th busiest station in Sydney, seeing around 54K passenger daily.
The Hotel reports nearly $7 million in annual revenue, through bar, bistro, gaming and other generators, with circa 55 per cent coming from gaming. It is currently ranked #304 and is consistently the third-highest performing pub in North Sydney LGA, behind The Oaks and the Crows Nest Hotel.
Marketing literature says the pocket rocket pub is considered one of the strongest businesses in the CBD “on a ‘pound for pound’ basis”, and being in a green zone (SA2) lends scope to increase the number of machines to 30.
Barry has operated his eponymous pub for the past 13 years, and there are now 12.5 years remaining on the lease. The business currently pays base rent of around $507K (+gst), which at only 26.1 per cent of EBITDAR is well below market norms.
Importantly, sale of the leasehold includes ownership of the liquor licence and gaming entitlements, which at current value of $375K each “should therefore give the market enormous confidence in what they are buying,” says HTL Property’s Blake Edwards, managing the sale with colleague Sam Handy.
North Sydney CBD is experiencing significant, unprecedented growth, driven by a combination of government investment and planned infrastructure, alongside private development interests seeking to accommodate another 6K residents and 20K workers over the next decade, adding to the 75K-strong local population and 150K people who already work in the area.
There are only seven pubs in the North Sydney CBD, and the tightly held nature of gaming-centric leases is expected to draw significant interest from multiple buyer segments, bringing price expectation of $13 million.
“Historically, gaming machine entitlements are currently at a very low price, and we expect the value of these assets to significantly appreciate over the course of the term of the lease,” adds Edwards.
The leasehold interest is being sold via Expression of Interest, closing Thursday, 17 April.
