The Laundy legion is back in The Gong, through acquisition of the Cabbage Tree Hotel in Fairy Meadow.
Located approximately three kilometres north of the Wollongong CBD, the CTH has been operated by husband and wife team Brad and Corrina Young.
The couple have built a collection of leaseholds, also counting the Postman’s Tavern in Nowra and the Bomaderry Hotel. Their lease at the Cabbage Tree had around 14 years remaining.
Although the Youngs had talked turkey with the landlord, they were stymied by a lack of capital levers to activate to achieve the optimum valuation for the pub.
Laundy Hotels has previously operated in the area, but sold its collection of leaseholds – the North Wollongong, Balgownie and Charles hotels – in 2012 to ALH.
Having recently found themselves underbidder in sale of the Lake Illawarra, they were on the hunt for another freehold in the area.
Mike Courtney’s Courtney Super Fund was looking to divest the 4,740sqm site of the CTH, holding the hotel licence and 15 gaming machine entitlements. Looking to realise the investment after close to 40 years of ownership, JLL Hotels’ Ben McDonald and Kate MacDonald were engaged.
A deal was subsequently done for the freehold to be sold to the Laundy-backed vehicle, with partners Nick and Justine Tindall, and the Youngs.
The final result was said to be circa $11 million plus the value of the operation.
This sees the re-stapling of the freehold and leasehold interests for the first time in decades, which helps the Youngs into their first brick and mortar stake, and significantly bolsters the value of the asset as compared with separate values on the freehold and lease.
“Brad believes now, as an owner, there are some capital expenditure levers he can pull that will allow him to really unlock the potential of the pub, and really turn it into something special,” explains Nick Tindall.
