Patrick Gallagher and partners have listed for sale the Chelsea Hotel in Chatswood, as they look to different new ventures.
Located opposite the western entrance to Chatswood station, the two-level Chelsea occupies a 765sqm strata site, providing public bar, bistro, bistro bar, and gaming with 30 machines.
It recently gained council approval to extend trading hours from 1am to 4am. Final ILGA approval is pending.
There has also been recent approval on a DA for a beer garden deck, which could be constructed immediately by new owners.
Gallagher Hotel Management and investors bought the Hotel early 2018 from Solotel, for circa $20 million, and brought the gaming room to full complement.
The Gallagher group maintains a balance and spread of freeholds, leases and styles, and just put down circa $50 million for the Campion family’s Longueville Hotel, at a reported yield of sub-five per cent, but the eponymous frontman says this sale is somewhat out of their control.
“The Chelsea is starting to show real trade growth so it’s sad to sell it, but we have partners in the asset who wish to do other things and the market is strong for these kinds of assets, so the decision was made to divest now.
“We’ll just turn our family group resources to the Longy and get on with what we love doing in this great industry.”
The Chelsea is one of only three hotels with gaming machines in the area, with Top100 performers the Orchard Hotel and Thomas Hotels’ Monkey Bar.
Gaming entitlements are currently fetching around $700k each – up almost 100 per cent in the past year – and projected to reach over $1 million each in the medium-term.
Chatswood rates alongside Hurstville, Eastwood, Bankstown and Fairfield as one of the highest density trading precincts in commercial, residential and retail population.
Agents offer that the precinct’s attributes further enhance the Hotel’s underlying value, in its alternate-use strata site, hotel licence and entitlements, generating an anticipated sale price north of $30 million.
“There would be no hotel in any of those other precincts that is worth less than $50 million today, with many having values nearing $100 million,” suggests JLL Hotels’ Ben McDonald, marketing the asset with colleague John Musca.
The Chelsea Hotel is being sold via Expressions of Interest, closing Tuesday, 18 October.
