Small-scale partial investors will revive the magnificent Federal Hotel in Deniliquin via a ‘fractional investing’ scheme driven by pioneering entertainment company Omecca.
The Federal Hotel, on the town centre corner of Napier and Cressy street in Deniliquin, was built in 1897 after a strike by the local fire brigade saw firefighters watch as the exiting Black Swan Hotel was burnt beyond repair.
A striking surviving example of Federation architecture, the two-storey brick building is adorned in classic features of the period, boasting big balconies and 21 accommodation rooms on a huge block.
Deniliquin is a Riverina town built around the Edward River, at the intersection of the Riverina and Cobb Highways, around an hour’s drive north of Echuca on the Victorian border, and about three hours west of Wagga Wagga.
Falling on hard times, the large-format Federal – known locally as The Feddy – closed in 2009. In late 2015 the vacant freehold was purchased by local businessman and property develop Paul Trowbridge.
The pubs remaining in the town of around 7,500 are struggling amid changing times and lack of capex.
Recognising the opportunity for a new concept in the imposing heritage building, a plan has been formulated between Trowbridge and Gary Patterson, owner of Omecca – a company that does boutique cinemas in pubs and clubs – to create an entertainment-based offering for locals and tourists.
Speaking with PubTIC, Patterson says the exact plans for the Hotel have not been finalised, as they are looking to gauge local interest and formulate a final budget for the project.
“It will be the classic pub and will forever be known as The Feddy, but it might come with a little bit more of a city sort of an influence,” says Patterson.
“We’re going to be activating an accommodation revenue stream there, and there will be food & beverage
“But the key anchor – driving the differentiation – will be the 50 to 60-seat dine-in cinema; the opportunity to eat and drink while you watch a movie, or whatever else we can put on a big screen in a cinema environment.”
Estimates on the project have determined a starting budget of around $1.5 million, which includes the cost of the title, sold in by Trowbridge. Around 27 per cent of this has already been secured, leaving a target of $1.1m to be raised.
The plan is to secure this through an investment campaign by DomaCom – a new breed of property vehicle taking advantage of changes in Australian laws to offer small-time investors slices of high-yielding investments, leveraging the concept of investing in property without purchasing an entire title.
“The DomaCom platform enables investment by anyone from anywhere,” continues Patterson. “And everyone wants to own a piece of a pub.”
This program is set to launch in Deniliquin next Thursday (7 September), offering units in a sub-fund, starting at $2,500.
The investor information cites expected capital uplift following the renovation of 15-20 per cent, and ongoing returns around seven per cent through rent on the property. Each investor will own a proportionate share, and receive rental dividends and the benefit of any increases in capital value.
Patterson and Trowbridge’s plan is to engage with the local community, encouraging those who will largely be the patrons to get behind it and invest in the revival.
This will also help to determine what it is the locals would like, with plenty of concepts missing in the town and the owners planning to offer several attractions. The big footprint of the property also allows the possibility of further developments at the rear that Patterson says he “can’t really talk about” yet.
“We think one of the things missing in Deniliquin is a micro-brewery. There’s no gin bar, no whiskey bar.
“We’ll work through the investment side, launch the thing and with a bit of luck get a good result.”
Deniliquin is home to the hugely popular Deni Ute Muster, attracting close to 20,000 people each year and reportedly injecting up to $13 million into the local economy.