High-flyers Arthur Laundy and John Singleton have sold their Manly institution The Steyne to booming Iris Capital in a record deal for a Sydney freehold going concern.
Built 1859, the Hotel Steyne has stood sentry over the Manly Beach for generations, on a big 1,948sqm block at the eastern end of the precinct’s famous Corso.
In 2010 a big-hitting consortium bought the pub for a reported $27 million from Sydney bookmaker Bruce McHugh. The new owners were Laundy, Singleton, investment banker Mark Carnegie, investor Robert Whyte, and at that stage retail billionaire Gerry Harvey.
The three-level beachside pub has since seen a few million spent in minor refurbishments, but for the past few years has been run entirely under management and while still pulling several hundred thousand weekly revenue was prime for a refresh.
Millionaire real estate mogul Singleton had ideas for a massive mixed-use development tower on the site, incorporated into the heritage building, but opinions were divided between the owners and it was determined to put the big hotel and any potential opportunities to the open market.
The landmark property, bolstered by its high traffic retail location and late-trading licence, unsurprisingly attracted consummate interest from the top end of town.
Sam Arnaout’s Iris Capital has been steadily progressing with its plans to hold a big stake in Newcastle and the Central Coast, underpinned by its $700m East End development, which it has been just announced will be anchored by Event Hospitality & Entertainment’s QT brand operating the accommodation.
The Group has made a string of acquisitions in the region, most notably Campbell Rogers’ trio of pubs in Newcastle, but also continues lofty aspirations in Sydney, such as the multi-site redevelopment in Kings Cross of The Bourbon and surrounding properties, currently working on a revised DA.
Arnaout has previously bought landmark coastal pubs and sold them having completed redevelopment, such as the Clovelly Hotel and Hunters Hill Hotel, and sees The Steyne as another proud piece of the Iris pie.
“This positions our company as a genuine hospitality leader in this part of the world, and complements our macro coastal investment strategy in respect to similar landmark projects.”
The successful publican-developer would not comment further on possibilities seen in The Steyne, but was likely influenced by the recently acquired DA to transform the existing two-dozen accommodation rooms into 40-odd luxury ensuited rooms.
The high-profile sales campaign was carried out by HTL Property’s Andrew Jolliffe and Dan Dragicevich, who note local, interstate and international investors “vigorously challenged” for the right to acquire the prize.
The deal went unconditional on Friday night, and Dragicevich says few have “comparable core fundamentals” to bring about what is said to be the highest price paid for a freehold going concern in Sydney.
“When combined with clear trading upside via capex and recently approved accommodation DA, it makes sense a hotelier such as Sam was attracted to the generational asset.”
Agents would not be drawn on the final sale price except to say it “exceeded market guidance” – which was greater than $60 million.
The record price paid for a going concern in Sydney did stand with the Lidcombe Hotel, sold for around $54 million earlier this year. The freehold of Byron Bay’s ‘Top Pub’ sold late 2017 for a reported $68 million.