Emerging pub group Monarch has divested its big footprint high-gaming Banksia Hotel in Rockdale to industry stalwarts Patrick Ryan and family.
The Banksia was purchased by Monarch Hotels – a joint venture between hotel business veteran Joel Fisher and New York hedge funds Vardé and York Capital – late 2015 from the Waugh Group.
The incoming executed an extensive makeover that has come to include famed chef Colin Fassnidge running the kitchen operation, and while it is still climbing in popularity and gaming rankings, it is the only hotel in Monarch’s portfolio outside the Top 50.
Ryan sold the bricks and mortar of the family’s long-held Republic Hotel in October, and the experienced f&b operator looks forward to taking on a new suburban challenge in a region on the rise. Due to take the keys early April, Ryan believes he’ll have his work cut out for him.
“I’m in awe of what they’ve done with that business, and thrilled with the challenge of taking it over.
“My intention is to get in there, try and maintain, and see if we can’t grow the community focus of the pub in a growth corridor of Sydney.”
Far from the hustle and bustle of the Ryans’ CBD staples, Rockdale is part of the south-west Sydney growth boom, with median housing prices lifting along with people’s expectations in the dining room.
“It all changes pretty quickly,” offers Ryan. “I’ve been dealing with chefs all my life. I met Colin for the first time the other day and my first question was ‘do you want to stay?’ and he said ‘yeah’.”
While the veteran hotelier says it was not a consideration in the purchase, the region’s growth curve is seeing increases in height limits and development, and the large-format 1,074sqm Banksia and adjacent properties may someday be in planning.
Ryan says Monarch CEO Joel Fisher “couldn’t be more helpful” throughout the negotiation, brokered through Ray White Hotels’ Asia-Pacific director Andrew Jolliffe.
The discreet transaction was virtue of undisclosed plans by the group on its future in the industry, and the off-market process “what we were tasked to do by Monarch Hotels in respect of this significant south-western Sydney property” said Jolliffe.
Still enjoying the fruits of its renovation, the Banksia climbed 68 places in the L&G venue rankings in the second half of 2017, but Monarch’s remaining assets are in a different tier. The Macquarie in Liverpool has risen to #46, the Belmore and Lidcombe hotels are both Top-20, and the only Queensland asset in the group, the Acacia Ridge Hotel, is the top-ranking gaming pub in the state.
While the remaining four are undoubtedly receiving ongoing offers in the hot, stock-starved market, sources have suggested to PubTIC that the portfolio, which Jolliffe describes as “an unmistakably unique cluster” is more likely destined for greater things.
In an environment where both Moelis and KKR are entertaining moves toward a potential IPO (Initial Public Offering), the backers of Monarch have successfully done that before already, in Australia.
Before Vardé and York finalised sale of the $677m Redcape portfolio to Moelis in mid-2017, they had successfully spun off HPI in late 2013, comprising a large portion of the Redcape freehold assets, into a successful IPO and ASX listing. The two companies are also currently involved with road-showing the Latitude Financial credit card business, likely to become the biggest IPO of 2018 in Australia.
Always entertaining optimal strategies for a future exit, a bolstered Monarch portfolio, currently cashed-up with a rumoured $26 million from sale of the Banksia, could see an alternate hotel IPO to market as soon as the end of the year.
Fisher did not reply to requests for comment in time for publication.