Listed landlord to ALH and Coles pubs HPI has divested the Payneham Tavern to an unnamed Sydney investor.
The Payneham Tavern and Liquorland drive-thru bottleshop are tenanted by Coles on a 20-year lease plus two ten-year options, with built-in annual rental increases around four per cent.
Located just outside the Adelaide CBD, the 7,887 m² asset incorporates the hotel, licence and 32 gaming authorities, and the blue-chip tenant pays all outgoings.
The hotel is a textbook example of the kind of passive freehold investment that has become one of the most prized asset classes in Australia, and typically held tightly by select parties such as HPI.
HPI (Hotel Property Investments) is the freeholder spin-off coming from the re-structure of pub owner-operator Redcape. HPI underwent a successful IPO in 2013, and has since strategically bought a number of pubs operated by the Woolworths-backed ALH and Coles-backed Spirit Hotels.
The Payneham was marketed by JLL Hotels Mathew George and John Musca, who report the $10 million sale price represented a tight 5.8 per cent yield for the “Sydney-based investor” that topped the competitive bidding.
“The five-week expressions of interest campaign, not surprisingly, attracted huge interest from the investment community, with over 50 enquiries nationally, generating 11 keenly contested bids to purchase,” stated JLL’s Mathew George.
HPI has not previously divested any assets to date, and may be seeking to free capital for further acquisitions.
