Newcastle-based hotelier Stephen Hunt has been courting investors to double the size of his hotels fund to $50 million, following strong growth and robust returns.
SJH Hotel Fund, run by Hunt Hospitality, owns hotel trusts around the Lakeside Village Tavern and Duke of Wellington freeholds, and Seabreeze Hotel lease, with a deal pending on the freehold going concern of the Kent Hotel.
Boasting a track record of 10-12 per cent cash returns, SJH has been in front of investors in Melbourne, Sydney and Newcastle, offering a 7.5pc annual return in the medium- to long-term, paid quarterly, with 15pc appreciation over the life of the investment.
Revaluation on the assets has just been completed, showing solid growth, and improvement works continue at all venues.
Hunt says the ‘Lakey’ has a pending DA for a larger gaming room, with negotiations to increase trading hours. The Duke – already enjoying the fruits of its new gaming room – has seen increases across the bar, with DA under approval for further upgrades. Plans have begun to hopefully install a rooftop bar at the Kent, and 2020 will see further capital works done at the Seabreeze.
Late 2018 SJH divested the Rutherford Hotel, realising a 52pc value gain.
The current $25 million raising will serve to reduce debt and allow consideration of further acquisitions.
The open-ended fund plans to provide analysis after 3-4 years on potential exit strategies, entertaining wholescale sale to a larger entity or listed vehicle. Subscriptions are filling fast; the minimum $50k stake available only to sophisticated and wholesale investors.
SJH reports all existing Novocastrian investors stepped up again, as the region experiences continued large-scale infrastructure development.
An award-winning third-generation publican, Hunt extols the wisdom of strong relationships with his staff and the returns that come from regular reinvention.
“You see your team start bouncing around a bit more … all of a sudden there’s a bit more vibrancy.
“I’m fortunate to be in the position where I can spend the money, but when you can, it’s almost like watering your garden.”
