On the heels of sale of Peak Invest’s Corrimal Hotel, Ludlow Hospitality is divesting its refurbished Five Islands Hotel in the Wollongong suburb of Cringila.
The Gravanis brothers’ Oscars Hotels bought the freehold going concern of the tired Hotel, built in 1956, wielding a reputation as a ‘daddy daycare’ for male patrons.
Oscars executed an extensive $2.5 million-plus makeover that saw the entrance moved, creating a new public bar and sports bar, a reconfigured gaming room with 22 EGMs, bistro with new family-friendly menus, and a large beer garden. There are also 12 accommodation rooms on the 2,314sqm site.
Freshly reconfigured, Oscars on-sold the Hotel to Ludlow Hospitality, fronted by major partner and veteran hotelier Paddy Coughlan, and backed by New York-based family offices.
Ludlow aims to be an ‘Opportunity Fund’ and set about further tweaking, realising uplift and potential in the new operation. The gaming operation is currently ranked #338 on the Liquor & Gaming list of NSW pubs – well up on its three-year average of #476.
The latest in a procession of big-ticket pubs trading outside of metropolitan precincts, the Five Islands is expected to see sale price of circa $30 million.
“Large format suburban hotels are hugely popular with investors, and have been so at an increased level since the beginning of the COVID-19 enforced travel restrictions,” says HTL Property’s Sam Handy, marketing the pub with colleagues Andrew Jolliffe and Dan Dragicevich.
Agents suggest this kind of sub-metro hotel asset has typically been “mispriced” until quite recently, and their qualities have begun to truly come to the fore.
“The scale and revenue diversification suburban hotels enjoy, is seen as a robust barrier to entry to new participants seeking to usurp market share,” added Handy.
The freehold going concern of Cringila’s Five Islands Hotel is being sold via Expressions of Interest, closing Wednesday, 18 May.
