On the back of recent successful divestment campaigns, Lantern Hotel Group has put to market the Beaumont Exchange Hotel, in Hamilton.
The ASX-listed Lantern (LTN) has enjoyed a number of hotel sales significantly above book value, and in continuation of its turn-around strategies at the hands of the new board of directors hopes to capitalise on the strength of the NSW market amid a shortage in quality assets for sale.
Its sale this week of the Bowral Hotel to “an existing hotelier and industry identity” demonstrated the potential of transactions outside the Sydney metropolitan area, with established hoteliers forced to look further afield due to the shortage of available options.
The Bowral brought the Group $6.35 million – 22 per cent above valuation at the end of 2015.
The Hamilton area is set to benefit greatly from State Government plans to boost local population and employment, with Newcastle slated for significant investment in infrastructure including a new light rail network.
“The Exchange Hotel is a great business in one of Newcastle’s premium suburbs, and has all the attributes of a top-performing pub, including a strong retail location,” noted CBRE Hotels national director, Daniel Dragicevich, who is marketing the Hotel in conjunction with colleague Ben McDonald.
“Lantern is seeking to tap into heightened buyer activity outside of the Sydney metropolitan area given the limited assets currently available for sale.”
LTN is executing a strategic shake-up of its portfolio and operations, introducing new efficiency and productivity measures that have already seen revenue improvements in gaming (up 18 per cent) and foodservice, and reduced costs in administration support.
A shareholder Update announcement last week cited a stronger team, geared to “lead a growing business” and the possibility of the first return of capital to shareholders in some time.
LTN purchased the Hamilton hotel freehold going concern in late 2014, but its plans to part with “non-core assets” have seen a number of lucrative opportunities for other operators to go market as it focuses on restructuring debt and optimising its remaining hotels. Recent sales have unlocked capital that has been used to further these businesses.
The Beaumont Exchange will be marketed through a national Expressions of Interest campaign, closing Thursday 9 June, 2016.