The award-winning Feros Group has sold flagship the Rocksia Hotel to Hall of Famers Bill and Mario Gravanis’ Oscars Hotels for a quick $36 million.
Both Chris Feros and the Gravanis brothers were central to the recent AHA NSW Awards for Excellence, where Feros’ new build The Prince took home four Awards including Hotel of the Year, and Bill and Mario were inducted into the AHA NSW Hall of Fame, receiving the coveted Cyril Maloney medal.
At just that time, Feros engaged CBRE Hotels’ Daniel Dragicevich and Sam Handy to shop the Group’s large-format Rocksia Hotel, and the Gravanis’ Oscars Hotels, headquartered just a few kilometres away, was one of the potential buyers approached.
The Rocksia, once a car dealership, sits on a 4,218sqm island site next to Banksia railway station, with residential development potential in the burgeoning Wolli Creek to Rockdale growth corridor.
While Chris Feros was praised for his ground-up greenfield build of The Prince, the Rocksia was in fact his first new build. A decade ago he and Nick Feros joined with industry stalwart Bob Richards, owner of The Strand, to convert the building into a big pub for Arncliffe.
As such, sale of the asset is bittersweet for the Group.
“It’s exciting news, really cool for us,” says Feros. “But our family is very sad that we’ve broken the partnership with Bob, because he’s been a gentleman to be in business with.
“Bill and Mario are great friends of ours, and it was just an absolute pleasure doing a deal this big with the boys. It was just easy.”
As Feros continues to build new and insightful pub offerings for growth areas around Sydney, his experience has centred on hospitality, while the Gravanis’ have residential builds in their past that will serve them well with redevelopment at the Rocksia.
The $36 million sale price denotes a tight yield, as quality freehold going concerns in Sydney approach eight per cent. This is indicative of its high cashflow operation and the kind of development potential dominating the biggest hospitality deals of recent times.
“Hotel sites with development potential is an emerging market sub-set a growing number of astute groups continue to assess quite aggressively,” notes Dragicevich, CBRE Hotels national director.
“They are a natural hedge against traditional hotel operations, on which valuation can be more reliant upon sustainability of income, as opposed to property value.”
Citing the “significant yield compression” seen across the board over the past 18 months, Dragicevich praised the parties behind the swift no-nonsense transaction.
“It was a pleasure to be involved in a deal between two of the hotel industries true stalwarts, and the price achieved is a testament to the vision the vendors had a decade ago.”