Lantern has sold its best yet to former Wallaby Bill Young, in a swift campaign fetching another big premium at nearly $29 million.
Coming to market less than two weeks ago, the ASX-listed Lantern (LTN) has announced the sale of prominent Five Dock Hotel, for $28.75 million. This is an enticing 38 per cent above the book value as at 30 June this year, for its most valuable asset.
Notching up #12 in LTN’s ongoing sell-down, the no-nonsense sale was seen as no surprise by Ray White Asia-Pacific director Andrew Jolliffe, who marketed the high-performing pub, ranked 115 on Liquor & Gaming’s list of NSW hotels.
“In effect, the market had been anticipating the sale of this prominent hospitality asset for some time; and the interest generated from the beginning of the sale campaign was commensurately strong,” Jolliffe notes.
Five Dock follows a distinguished list of LTN pubs to achieve hot-market prices, most recently that of Uncle Buck’s for $25.3m to Peter De Angelis, also sold prior to the close of the EOI, and Ambarvale Tavern for $21.2m to Colin Parras. Sources revealed to PubTIC the yield on the core sales has been around eight per cent, which is more like that of a blue-chip freehold than a strong freehold going concern.
These were the first of the ‘core’ venues to go to market, after the company determined last month to sell off its portfolio in a sector enjoying ideal conditions, particularly given interest rates and availability of finance.
The turn-around strategy employed by LTN’s new directors saw ‘non-core’ pubs sold off and the core assets benefit from capex intended to refresh their strengths and lead the Group into its next stage of profitability and expansion.
In October shareholders voted and agreed to also divest the core assets, in light of the top-dollar prices being achieved in a market starved of investment stock.
Nevertheless, as with the majority of LTN pubs, Five Dock still possessed considerable potential upside for the elite pool of candidates in the running to buy it.
“The Five Dock Hotel has performed very well since the recent introduction by Lantern Hotels of some modest capital, and I wholly expect the successful purchaser to unlock the inherent value so patently available with the benefit of time,” offers Jolliffe.
The Young family already own and operate the Concord Hotel, Palace Hotel in Mortlake, and Wiseman’s Inn in Wiseman’s Ferry.
LTN advise completion of the sale is expected to occur in February, 2017.