A revised Engadine Tavern and adjoining retail sites opportunity has been listed for sale, offering the large-format pub plus potential for a mixed-use redevelopment.
The south Sydney suburban Tavern occupies a 2,325sqm site, surrounded by retailers such as Woolworths, Coles, ALDI, and Dan Murphy’s yet holding an exclusive catchment in the ‘underpubbed’ area, with approximately 40k surrounding residents.
Keeping a 1am licence, it reports over $7 million in annual revenues across bar, bistro, gaming with 26 machines, wagering and retail liquor.
The business also holds an additional 1,279sqm of adjacent retail tenancies across two sites, generating passive annual income of approximately $165k.
There is said to be upside to realise by an incoming operator in activating the Tavern’s upper floor, and the gaming operation, ranked #415 with Liquor & Gaming, is Band 1, meaning scope to increase to the full complement of 30 machines.
Vendors on the sale are business partners Tony Denny, Gavin Duffy and David Stone, who combine expertise in property investment, development, and hotel operations. The trio bought Engadine from White & Partners for circa $31 million, early 2021.
They acquired the hotel with a planning approval in place for 64 luxury residential apartments on the hotel’s adjacent car park, and set about activating it. A decision was made to divest the hotel and opportunity earlier this year, but the development has begun construction, and is said to be already close to completely sold out, off the plan.
This residential development, known as the Heritage Apartments, has been subdivided from the hotel and is not part of the sale.
But the consortium also acquired another adjoining retail property, and reiterating the motive of a longer-term plan to diversify into other real estate asset classes, is now selling the amalgamated hotel and adjoining retail sites – with their own pre-DA plans available.
Proposed is a mixed-use redevelopment that would relocate and reduce the size of the Tavern, facilitating a ground floor 2,000+sqm retail footprint for a supermarket or similar, with up to 54 apartments above (STCA). The three sites enjoy favourable development metrics of B3 Commercial Core zoning, 20-metre height approvals and 2:1 FSR.
“We believe the divestment of the Engadine Tavern and adjoining retail sites represents an amazing opportunity for a prospective purchaser to acquire a large format hotel with development upside in Sydney’s south-west,” offered Stone.
The revised offering is being marketed by HTL Property’s Sam Handy, Dan Dragicevich and Andrew Jolliffe – in conjunction with Highland Commercial Property’s David Highland and Luke Barbuto, who hold extensive experience within the Engadine town centre, and citing the response to the Hermitage apartment sales say there is a “distinct lack of supply” of newer apartments in the precinct.
“We anticipate the campaign will generate interest from a broad spectrum of suitors,” replies Handy.
“These will range from hoteliers interested in reinvigorating the offering through to developers, land bankers and investors attracted to the site’s strategic land holding offering flexible redevelopment and site amalgamation options.”
The Engadine Tavern freehold going concern and adjoining retail sites is being sold via Expressions of Interest, closing Wednesday, 14 December.
