The De Angelis family has divested their big, brassy Bath Arms Hotel in Burwood, in the latest high-profile Sydney sale in an effervescent market.
Joining the roadside inns established along Parramatta Road to service the coaches on the Sydney-Parramatta run, the Bath Arms Inn was opened on the corner of Burwood Road in 1834.
The original timber structure stood until 1937, when it was demolished to make way for the present two-storey brick Inter-war Art Deco hotel, adorned with parapet and decorative stucco detailing, on the current 2,561sqm lot.
It has been recently renovated and refurbished, featuring an expansive trading footprint around a single service point, gaming room with 30 machines, 16 accommodation rooms and 25 car spaces. It generates annual revenue of around $8 million across departments and is under a 3am liquor licence.
The site holds favourable planning approvals and high visibility frontages to both Parramatta and Burwood roads, and being within the state government-sponsored Burwood North Precinct Masterplan it has significant mixed-use redevelopment potential.
It also benefits from being adjacent to the Burwood North metro station, currently under construction, which forms part of the infrastructure being built to service the projected population explosion triggered in the precinct, as 15K new homes are constructed.
DHI Hotels operates a collection of Sydney pubs, and has regularly invested in big-ticket assets. In 2019 the group acquired the Raby Tavern for around $35 million. In late 2023 DHI doubled the expansion rate with purchase of the Ingleburn Hotel, and then Redcape’s Mount Annan Hotel for $52 million, which proved to be one of the biggest pub transactions of the year.
Burwood’s Bath Arms Hotel was acquired in 2012. Over the past decade or so the family has repositioned and modernised the business through strategic enhancement, most recently including works to rectify damage from a fire in one of the tenant’s hotel rooms, late last year.
Looking to the coming years, DHI will concentrate on several brown- and greenfield pub developments it has in the works.
“Following our strategic portfolio review, we’ve determined to reshape our stable of hotels and focus time and financial capital more liberally towards greenfield projects – an area of our multi-faceted business in respect of which, has continued to reward our concerted efforts,” says hotelier Peter De Angelis.
The sale, for a reported $43 million, represents a sharp sub-seven per cent yield not seen for some time in gaming-centric hotels in the Sydney metro.
Amid strong trading conditions and anticipated further easing of interest rates, selling agents Dan Dragicevich, Sam Handy and Andrew Jolliffe of HTL Property are predicting even more “elevated transactional activity” into the end of the year.
“The sale of the Bath Arms Hotel is symptomatic of both the current industry sentiment and ongoing, laser-like investment market focus on pubs as an asset class,” says Dragicevich.
This sentiment has been apparent in other recent city-fringe sales by the firm, such as the Crystal Palace Hotel on George St, sold to JDA, and the Agincourt Hotel on Broadway.
“The combination of deliberate lending institution behaviour and the weighted average cost of capital contracting means hospitality asset metrics look as proud today as they have at any other point in time,” adds Jolliffe.
