Woolloomooloo Bay Hotel, Woolloomooloo

The Laundys have flashed the cash, tempting Medich into the sale of two more ‘big deal’ pubs.

In a transaction worth nearly $35 million, the Medich family’s Halcyon Hotel Group has parted with two more jewels from its rapidly shrinking crown, following last month’s surprise divestment.

The freehold of the iconic and ALH-tenanted Woolloomooloo Bay Hotel sold for around $20 million, and the freehold going concern for suburban landmark the Woolwich Pier Hotel sold for nearly $15 million.

The Woolloomooloo Bay, overlooking Sydney Harbour, the uber-trendy Finger Wharves and the legendary Harry’s Café de Wheels, is now number 33 in Laundy’s stable of freeholds leased to blue-chip tenant ALH.

“A-grade hotel properties indexed to strong ALH leases are an entire assets class on their own,” says Ray White director Andrew Jolliffe, who brokered the sales with colleague Joel Fisher.

Woolwich Pier Hotel, Woolwich
Woolwich Pier Hotel, Woolwich

Also teased away from Halcyon was the local favourite Woolwich Pier Hotel, standing alone on Clarkes Point, not far from Sydney hospitality heartland, St Joseph’s College (“Joeys”).

Arthur, his son Stuart Laundy, and partner Fraser Short all went to Joeys, and maintain their long-standing connection.

The Woolwich Pier has long been the pride and joy of Halcyon’s pub portfolio, and its sale is clear indication of the competition for strong assets in the current trading environment. The sale just two weeks ago of Mosman’s Buena Vista – just a year after the Group purchased it – started what has become a $50 million sell-off of three quarters of Halcyon’s pubs.

Its remaining pub, Woollahra’s Centennial Hotel, which it purchased early last year around the same time as the Buena Vista, has been overhauled and repositioned as a sophisticated foodie venue. Industry sources tell PubTIC there are currently no plans to sell this, nor any imminent exit by Halcyon from the industry.

The Medich Corporation website shows how pubs are just a small part of the family’s property and development interests, and from reports that Anthony Medich is a tireless perfectionist, it may be they are finding hospitality too time-consuming for the rewards – particularly in the context of top-dollar offers to relieve the burden.

Following Charter Hall’s massive $600 million acquisition last year of 54 pubs leased to the Woolworths-backed ALH, and subsequent plans for $200 million more, the covenant of this particular asset continues to prove irresistible.

“Charter Hall know the value, HPI know the value, ALE have known the value for some time as illustrated by their sustained share price performance, and now we have a book full of private investors who can also quickly identi​fy with the value proposition when they see it​,” said Jolliffe.​

Last year, Ray White similarly transacted two other ALH-tenanted freeholds – Airlie Beach’s Magnums Hotel and Fairfield’s Cambridge Tavern in western Sydney, for $17.5 and $20 million respectively. Ray White says competition amongst buyers shows only limited regard for location, with “considerable depth of capital chasing limited stock opportunities”.

“Neither sale process saw the end of the allotted time-frame,” reports Fisher.

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