Merivale frontman Justin Hemmes has signed on the line for Merivale to acquire the Solotel-operated Sackville Hotel in inner west hotspot Rozelle.
In May the Sackville was brought to market along with the Bank Hotel in Newtown and The Clock in Surry Hills, touting combined annual revenue of approximately $40 million, with impressive year-on-year growth of 11 per cent.
The pub freeholds were being sold by privately owned Amalgamated Hotels P/L, which counts Solotel founder Bruce Solomon and Fairfax family associate Lee Thomas as directors.
Solotel, known for managing high-performing pub assets in many premium precincts, has operated the three hotels under a management agreement since Amalgamated purchased them in 2000.
Group CEO Elliot Solomon offers they are transitioning to a “smaller, sharper” outfit led by the Solomon family, which he says provides a “clearer path forward”.
“With these changes, the next chapter of Solotel is more clearly defined – a focused group of family-owned pubs, bars and restaurants.”
Standing on a prominent corner lot of 1,391sqm on arterial Darling Street, Rozelle’s retail and hospitality centre, the Sackville was built in 1876, originally trading as the Bellevue Hotel. 150 years on it enjoys extended trading, providing public bar, dining, gaming room with 19 machines (entitlements) and a bottleshop.
It’s seen to have significant long-term upside in the inner west haven of Rozelle, which is becoming one of Sydney’s most desirable lifestyle suburbs, benefiting from substantial infrastructure and urban renewal investment such as the Sydney Metro West project and the $800 million Rozelle Village redevelopment, increasing connectivity to the CBD, supported by an affluent demographic.
Available individually or in-one-line The Bank, The Clock and The Sackville were tipped to see total sale value north of $100 million, with the Rozelle pub being sold as a vacant possession and said to be hoping for sale price as high as $60 million.
Merivale has exchanged contracts on the acquisition, with completion subject to ACCC clearance as the group already holds the 3 Weeds Hotel in Rozelle, purchased early 2019.
The Sackville sale included an adjacent property suited to expansion of the operation. Sources suggest Hemmes agreed to pay in the mid-40 millions for the two properties.
The titles were offered to market for the first time in more than 20 years in an EOI campaign through JLL Hotels’ John Musca, Ben McDonald and Kate MacDonald, The Sackville reportedly attracting strong interest from both Australian and international buyers, drawn to its scale, performance, location and repositioning potential.
Agents say it is another example “despite broader market volatility” of the resilience of premium pub investments, particularly those with diversified revenue streams and “entrenched” relevance in their locality.
“The Sackville represents a well-positioned hospitality asset in the Inner West, combining strong existing cash flow with significant future upside in a rapidly evolving precinct,” notes McDonald.
