Australia’s most dynamic pub real estate investment trust is offloading one of its prime Coles-tenanted assets while the investor market runs hot.

Hotel Property Investments (HPI) is the ASX-listed REIT (Real Estate Investment Trust) that was spun out of the former Redcape portfolio in late 2013.

HPI currently holds 44 properties across Queensland and South Australia, valued at just over $580 million.

Payneham Hotel_Adelaide_games area_crpsqIt is offering the freehold investment Payneham Tavern, located on 7887 m² just five kilometres from the Adelaide CBD and leased long-term to blue ribbon tenant Coles and Liquorland, with price expectations near $10 million on a “circa six per cent” yield.

The property is being marketed by JLL Hotels, and national director of pub investment sales John Musca told PubTIC HPI recognises the strength of the investor market for passive freeholds.

“With the market starved of supply of AAA assets, it makes sense to realise value,” says Musca.

“This is an exceptional capital city land-banking opportunity delivering an assured annuity income from arguably the best stable of tenancy covenants in the country – Wesfarmers and Coles.”

Coles operates the hotel on a 20-year + 10 + 10 option lease, with net annual rent around $600,000 subject to built-in annual increases around four per cent. The lessor holds the 32 gaming authorities and hotel licence, and pays all outgoings.

The Expressions of Interest campaign is due to close Tuesday, 10 May 2016. See full details HERE

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