A private investor is offering to market the freehold interest of well-known Richmond pub DT’s.
DT’s Hotel, formerly known as Citizen’s Park Hotel, is situated at the busy corner of Church and Highett Streets. It has been a colourful Richmond institution for decades, popular with the city’s LGBTI community.
The suburb is one of relentless gentrification, with a growing residential and retail demographic and investment in infrastructure projects such as the State government’s $43 million construction of Richmond High School, and Epworth HealthCare’s $350 million redevelopment of its private hospital in Richmond.
The Hotel is operated by Paul Anthony, who is three years into a ten-year lease with four further five-year options, meaning it could be securely occupied until 2045. The rental terms include fixed annual increases, recently moving to almost $99k annually.
Looking to test Victoria’s red-hot freehold market, the private owner has listed the asset with JLL Hotel’s Mathew George, who suggests with all outgoings paid by the tenant and a recent refresh, there’s nothing to do “but collect the rent”.
“The property provides purchasers with a secure lease in place backed by an experienced hospitality operator and hotelier, and will suit long-term investors, industry participants or set-and-forget developers.”
Passive freeholds on quality hotels in Victoria have seen cap rates as sharp as three per cent, and George sees DT’s as “the rare opportunity to secure a prized piece of property in a tightly held blue ribbon inner-east suburb with fixed and secured 3.5 per cent annual growth”.
The asset is being sold subject to the lease conditions, with price expectation over $2.5 million.