After some speculation, Merivale has confirmed its acquisition of the famed Royal Hotel at Bondi.
The Royal is a Bondi Road institution, and part of local folklore. It saw the founding meeting of the historic Bondi Surf Bathers Life Saving Club in 1907, and in 1966 hosted a scene from the kitsch Australian cinema classic They’re A Weird Mob.
The Moulding family bought the lease to the 1904-built Hotel from Tooth’s in 1978, and later the freehold, in 1990.
After 40 years and too many unsolicited offers to sell to count, custodian proprietor Geoff Moulding put the pub to market in early October through JLL Hotels.
The diamond-in-the-rough attracted a reported 80 enquiries and ten serious bids, before Justin Hemmes won the race.
“I can’t remember ever selling a hotel that attracted this level of interest,” said JLL national director John Musca. “Not surprising, given Bondi’s burgeoning global status, the area’s gentrification, and the Hotel’s manifest repositioning potential.”
The Royal’s tired format and dated operational capabilities, not equipped to capitalise on the world-famous precinct that has developed around it, has been generating a lacklustre return for a main road Eastern Suburbs pub. The opportunity-laden sale price circa $30 million represents a benchmark yield around four per cent.
Hemmes may not take the keys until as late as July 2018, and has not yet disclosed any thoughts for the time-warp pub. It holds 20 accommodation rooms set up for backpackers, as well as a four-bedroom manager’s residence, which could suit (consolidated) 10-12 boutique rooms with ensuites and see Merivale add another string to its bow.
The group has been on a dizzying buying spree, recent additions including the $21m Collaroy Hotel and $22m Vic on the Park. Last December’s $37m purchase of the Tennyson Hotel has spawned the recent launch of a pop-up Italian eatery there – Mr Liquor’s Dirty Italian Disco. The second phase of The Newport will open this summer, as well as the already refurbished Collaroy, currently boarded up.
Hemmes says plans for the Royal will be “announced in due course”, but he will likely transform it in a way that few others could.
And despite the $100m+ shopping spree of the past year, the pub king is still open to further acquisitions, and potentially even taking the Merivale brand overseas.
