The post-pandemic purse strings have loosened, with Moelis Australia Hotel Management topping the bidder list for the prized Courthouse Hotel Darlinghurst, sold for the first time in 30 years, for $22 million.
The Courthouse is an icon of the Oxford Street precinct, the four-level main property landmarking one of the four corners of Taylor Square, and its 24-hour licence and ‘always open’ reputation attracting the end of many a colourful night. The operation includes gaming room with 24 EGMs, and nine accommodation rooms upstairs.
It was purchased in 1990 by the late legendary hotel patriarch Claude Wright, along with his daughter Barbara and son-in-law Steve Page and a collection of investors. The stakeholders retain interests in pubs across Sydney. Typically not sellers, the Courthouse is a rare divestment.
Sale included an adjacent commercial property, between the Courthouse and Kinselas.
As the legacy of non-stop entertainment in nearby Kings Cross is gradually relegated to history courtesy of its new-found purpose in boutique residential, Oxford Street has survived to become the only remaining – and unquestionable essential – late-night entertainment precinct in Sydney.
The future prospects of the immediate area can be seen in the 99-year lease and $200 million accommodation project by AsheMorgan and Toga, occupying around three blocks of Oxford St opposite the Courthouse.
These conditions made for a heated sales process, with eight major bidders taking something of a counter-cyclical view ahead of the renaissance expected for Oxford Street in coming years.
Moelis Australia Hotel Management (MAHM) notes the appeal of the Courthouse’s strong underlying land and property value. The Hotel has drifted in gaming performance, falling over 200 places to #683 on the Liquor & Gaming list of NSW pubs since early 2019.
MAHM also cites a new investment platform behind the acquisition, the Moelis Australia Courthouse Fund, allowing for its governance and capital management while “creating material stakeholder alignment” by providing access for both Moelis client investment and operational managers to invest in the hotel.
The group believes the Hotel will benefit from its experience operating large venues and its stewardship through major refurbishments, creating opportunity for the Courthouse to “re-establish its role as a community hub”.
“The landmark community hotel has a prominent place in the history of the Darlinghurst and Oxford Street community,” notes MAHM CEO Dan Brady.
“MAHM will honour this as we look to re-establish the hospitality heartbeat of Taylor Square through a refurbishment that celebrates its significant heritage.”
The family engaged HTL Property’s Dan Dragicevich, Andrew Jolliffe and Sam Handy to conduct the off-market sale, intended for a selection of targeted buyers but escalating into a tender process, when word got out.
“The Courthouse has to be one of the most recognisable pubs in Sydney and having been in the same hands for over 30 years, the uniqueness of the offering attracted significant interest from a broad range of buyer profiles,” offered Dragicevich.
Entering peak buying season after perhaps the most tumultuous year in hospitality history, buoyed by historically low interest rates, HTL is finding “the right market” can make for a textbook win-win.
“We have seen strategic advances implemented by clients, whether on the buy or sell side of transactions during this past year, that have extracted hugely rewarding outcomes,” added Jolliffe.
