Suburban stronghold the General Gordon Hotel is the latest big-ticket Sydney pub sold, picked up by Feros’ JDA Hotels – weeks before it reopens from a fire that closed it over two years ago.
In July 2018 news broke the GGH had been badly damaged by a fire that began in the second level, causing the roof to collapse and damaging neighbouring buildings.
Located opposite Sydenham Train Station, the blaze stopped trains for a few hours until firefighters got it under control.
The pub was purchased from the exiting Lantern Group in early 2017 for $18.1 million by a Trust controlled by White & Partners, and agreement was struck with JDA Hotels to manage operations.
After extensive discussion with local planning and a decision to also restore the pub’s heritage façade, the new GGH is almost complete and slated to open in April.
At some stage the Trust owners made a decision to divest, opting to inform only select candidates in an off-market EOI process.
JDA were given the option to participate, but were assured obligation to investors meant only the “highest and best” offer could be considered.
Andrew Jolliffe and Dan Dragicevich of HTL Property were engaged to execute the closed process, and obliged to inform other parties the incumbent managers were in the bidding.
Agents report the process run was akin to that where Moelis bought Surry Hills’ Courthouse, and Laundy Group bought the Bidwell Hotel, late 2020.
Typically, an incumbent operator might have an advantage in the sale, with inside knowledge of trading and opportunities, but the yet-to-open pub is a blank canvas and all players were on a comparative field.
In the end JDA wanted the new digs more than any newcomers, and topped the short list for approximately $30 million.
Feros says the eventual MBO-style (management buyout) acquisition was aided by his confidence in the process that if they put up the best offer he would be rewarded accordingly.
“We have enjoyed a long and favourable association with the hotel, and following the unintended hiatus we are now super excited about the magnitude of not only the rebuild, but also the vast potential contained in the area, with its substantially enhanced transport services on our doorstep an unmistakable value underwriter,” offered JDA founder and CEO, John Feros.
A strong start to the year, after one plagued with headwinds and postponed sale campaigns, hints at the pent-up demand in hotel transactions and bodes well for 2021.
“There are fewer and fewer market commentators prepared to blackguard the asset class, given the patent strength and regularity of material transactions such as this one,” suggests Jolliffe, HTL’s Asia-Pacific director.
“So much so, that in the absence of a left field market transgression, our retained and considered view is that the next 24 months will see the greatest period of market activity on record.”
