LINQ is charging ahead with its big plans and project in Townsville, offering the renovated Newmarket Hotel icon and a revised approach to hospitality assets.
Leisure Investment North Queenland (LINQ) is a group of hospitality veterans headed up by Richard Mraz that snapped up the Newmarket September 2017 after a once-over inspection.
Mraz reported at the time the group has been extensively researching opportunities, considering factors including employment and income levels, and that Townsville was seen as particularly prime for success, with massive investment in infrastructure and residential development.
With the purchase came plans for a top-to-bottom makeover of the 1930s pub, upgrading plumbing and electrics, including 2.5 tonnes of solar panels, and new LED lighting and refrigeration systems. The primary focus was on operational efficiency.
It offers four bars, a function room, steakhouse, beer garden and 15 highly-appointed guest rooms, plus an ample manager’s residence.
Townsville is seeing average occupation rates around 70 per cent, making the accommodation one of the Hotel’s biggest profit opportunities, capable of covering operational costs for the whole business.
Close to completion, the revised Newmarket will be ready to capitalise on the burgeoning region, most significantly the 25,000-seat Stadium, now 18 months from completion. The Stadium will be home to the North Queensland Cowboys and is expected to become one of the State’s premier sporting venues.
LINQ note the trend toward more open and female-friendly layouts in pubs, and believes as gentrification creeps from the cities to regional centres there is an increasing need for considered investment.
“Townsville comes out on top at the moment for cost of entry, classic architecture, and key projects, namely The North Queensland Stadium, which will make Townsville a regular destination for a catchment from Rockhampton to Cairns.”
LINQ sees itself as a company that actively manages assets, believing an optimised and well-maintained asset enables operators to do their best work. It oversaw the $1m renovation process and offers price guidance on the Newmarket of $3-5 million, which Mraz suggests is a fraction of a comparable freehold going concern – as seen in Redcape’s $20m purchase of the nearby Sun Hotel.
“The current business model of both the freehold owner and lessee financially sweating many hotel assets into disrepair has run its course,” he says. “The incentive was just not there for regional Hotels to evolve with the times.
“Only an inspection and explanation of just how strong the Newmarket proposition is – the extent of the renovation, and longevity of appeal – will let the purchaser realise the true upside. We expect the next owner to enjoy a blue-chip investment at under true market value.”
Unusually, LINQ is open to selling the freehold outright, or negotiating a mutually-beneficial lease, potentially incorporating a starting cap and future rent based on turnover.
The group has engaged Mark Fitzgerald of Knight Frank Townsville to market the opportunity, who noted its potential in light of Redcape’s Sun, less than 3.8 kilometres away.
“The west end of [Townsville’s main road] Flinders Street, has the perfect ingredients for success, with the ATO moving in 500m away, the NQ Stadium main entrance 500m away, and a catchment of affluent worker and residential demographics.”
The freehold vacant possession or leasehold interest in the Newmarket Hotel Townsville is being sold through Knight Frank via Private Treaty.