Another big Sydney pub with oodles of potential has changed hands, with John Lewis adding to his western suburbs stable with the Lalor Park Hotel.
The large suburban pub occupies 3,048 m² on busy Sackville Street, minutes from Blacktown CBD and adjacent to the ‘North-East Precinct’, which has been rezoned for medium- and high-density residential. This will see construction up to 24 storeys, dwarfing the current maximum of eight storeys.
Interests associated with industry veterans the Murphy family, former owners of the Woolloomooloo Bay Hotel and Glebe’s Toxteth Hotel, have had the Lalor Park available off-market for some time. They purchased it back in 2008, and as currently ranked #162 on the Liquor & Gaming list of venues, there was no mandate to sell.
After considerable negotiation and a five-month settlement, Lewis Hotels has taken the title for around $22 million, representing a sub-ten per cent yield and considerable bargain after the whirlwind that was Lantern’s strategic sell-down in 2016, which drove down yields on several of its under-performing pubs boasting big opportunities.
The Lalor Park is not short of upside, with a 24-hour licence, only 22 of its 30 EGMs in smoking solution, and a very young food offering courtesy of a recently installed commercial kitchen. (continues below)
John Lewis’ operation took over this month. Lewis declined to comment on the purchase, but noted he already has big plans and is excited about the future. He expects the Hotel to mature into a “nice asset”.
The transaction was negotiated off-market through JLL Hotels. National director – pub investments John Musca was unable to comment on the sale, but suggested circumstances benefited the buyer, including finalising prior to the recent feeding frenzy on top Sydney pubs.
“As the rush for the Lantern assets demonstrated, buyers prefer to follow in owners who have been less hands-on in their operating approach, particularly in areas with historically strong gaming contributions where assets require refurbishment. Lalor Park was one such hotel.”
For a year that has seen a considerable shortage of hotel stock come to market, and investors clamber for slices of pub pie, the final quarter has made up for any dry spells, and Musca suggests the party is still going.
“The transactions aren’t quite over yet and we’ll be announcing more sales in the coming days, where buyer and seller alignment will close out a busy transactional end to the year for all.”
