Prominent Sydney publican Dean Haritos has been tempted to market with his last pub, offering the high-end Verandah Hotel to a galvanic market.
Located between Castlereagh and Elizabeth Streets, adjacent to Martin Place, the Verandah occupies a generous 1,000 m² with frontage on both streets, courtesy of two alfresco areas.
The Hotel is operated by Dean Haritos, who sold his long-held Light Brigade Hotel to the Bayfield family mid-2015, after citing continued market inquiry and pressures from other business interests. A hungry and determined market sees history repeat at the Verandah.
“In much the same way we were when we brought The Light Brigade Hotel to market, the unsolicited enquiry we’ve fielded for Verandah Hotel has been such that we felt it was appropriate to engage the industry specialists and put some process around the constant enquiry,” says Haritos.
The pub enjoys a long 29-year lease to Dexus Property, which owns the 20-storey A-grade office building in which it occupies the mezzanine.
Already a strong trader and popular haunt for big-hitters in the legal and financial districts, including former Prime Minister John Howard, the Verandah will increasingly benefit from local works – such as the redevelopment of the former NSW Leagues Club opposite, compulsory acquisition of its closest competitor and most notably the construction of the Metro Station almost directly outside, slated to see 200 trains per hour.
The business comprises multiple bars, a separated gaming and wagering area with 20 EGMs, and an upmarket restaurant. Annual revenues already exceed $7 million, and it is currently #282 on the Liquor & Gaming list of NSW venues.
It is being offered to market for the first time through Ray White Hotels’ Asia-Pacific director, Andrew Jolliffe who managed the sale of the Light Brigade for Haritos.
Already enjoying one of the densest and most affluent catchments in Sydney or Australia, Jolliffe says the State Government’s light rail plans are the icing on the cake.
“The redevelopment of Martin Place Metro station is a phenomenal injection of infrastructure investment in the CBD precinct, bringing some 10,000 commuters to the Verandah doorstep every hour in peak periods, and really speaks to the future-proofed nature of revenue for businesses like Verandah.”
Professional investor dollars returning to the Australian pub industry in recent years has seen more and more examples of publicans focusing on their business returns – without the bricks and mortar.
Exemplified by Woolworths’ ongoing buy-and-lease-back program, the gambit has been adopted by plenty of other operators, particularly Solotel, parting with the land title to its Double Bay icon the Golden Sheaf, and more recently at the Albion in Parramatta.
Jolliffe suggests Verandah leasehold will be a similar game in like company, as sources suggest the business is likely to fetch around $9 million.
“ALH, Woolworth’s prolific pub arm and the nation’s largest hotelier has, by its actions, made no secret of the fact that less balance sheet-intensive investment in the hotel industry is a preferred investment criteria fit.
“Solotel has [taken] advantage of both freehold and leasehold opportunities in the market place wherever they see the ability to create value.”
The Verandah Hotel is being sold via Expressions of Interest, closing Thursday, 16 March.
