The Dennis family has offered up their big, long-held Australian Hotel in Nowra, anticipated to be one of the south-coast region’s most keenly contested sale campaigns.
Located on a 2,665sqm site in the heart of the Nowra CBD, the pub is one of only two on the northern side of the Shoalhaven River. It adjoins an ALDI shopping centre, adjacent to both a Coles and Woolworths.
A suburban local, it provides bar and wagering, bistro, gaming room with 26 machines, and bottleshop.
The gaming operation is consistently the strongest performer in the LGA, averaging Liquor & Gaming rank of #465 over the last 12 months and despite an outdated room, outperforming the nearby North Nowra Tavern, which has more machines.
Across departments the Aussie reports around $6 million in annual revenue, with immediate scope for increasing this by reactivating the 15 accommodation rooms on the first floor, which are currently dormant.
The liquor licence is approved for extended hours trading, and the site holds approved plans for both a new gaming room, on the southern side, and reconfiguration and refurbishment of the rest of the hotel.
Industry sources suggest it is likely to fetch sale price of around $20 million.
Michael and Kylie Dennis have owned and operated the hotel since purchasing the freehold in 2008.
They cite having recently secured the DA approvals and looking to consolidate their business interests closer to home as their rationale behind the sale, and believe it represents a major opportunity for the right buyer.
“There are only two hotels and one big club within the Nowra CBD, and our modelling suggests that the new destination gaming room would be capable of being a consistent TOP200 gaming performer once it is completed,” says Michael Dennis.
Pubs on the NSW south coast have proven very desirable, possessing attractive macro investment fundamentals and high barriers to entry. The Nowra-Bomaderry catchment is emblematic of this, counting only five hotels amongst a population of around 40k residents.
Pub sales in the region include when Redcape bought the Denfish portfolio of the Central, Unanderra and Figtree hotels for circa $50 million in late 2018, and that of Damien Kelly’s North Nowra Tavern for around $22 million in early 2022.
The region is set for more growth, with the recent gazetting of the 425-Ha greenfield site known as Badagarang, destined to bring approximately 3,500 new homes and 10k residents to the catchment.
A sale campaign is being conducted by HTL Property’s Sam Handy, Dan Dragicevich and Blake Edwards, who note the “very rare indeed” nature of an unrenovated pub performing as well as the Aussie.
“The upside and the ability to rapidly build value into this asset is as clear as it is obvious, with the activation of the approved destination gaming room,” notes Handy.
The freehold going concern of the Australian Hotel is being offered via Expression of Interest, closing Thursday, 14 March.