Kent Walker’s high-performing Earlwood Hotel has been snapped up by the newly-formed Orion Hotel Group, in a continuation of industry behaviour driving escalating values.
Earlwood is a one-pub suburb virtually surrounded by suburbs with no pub, and benefitting from the Canterbury-Bankstown Masterplan, bringing upgraded town centres, high-rises and 24-hour commercial hubs.
Enjoying a wide trading catchment and limited competition, the multi-storey Hotel, built in 1931 on an 825sqm lot, provides a modern public bar with TAB and 24-hour liquor licence, gaming room with 29 machines and average ranking of #152, courtyard beer garden, bottleshop and 21 accommodation rooms.
Recently refurbished, it was put to market in March, reporting revenue across mixed departments of almost $130k per week and potential by way of the underused accommodation and the f&b operation, which is currently leased to an outside operator.
The sale price now of around $46 million exceeds expectations, finding a tight market yield of mid-five per cent.
Orion Hotel Group is a new three-way venture formed by the Wiggins, Savas and Docker hotel families that is said to have been created to seek out Sydney-based opportunities.
Nick Savas is the owner of the Sir Joseph Banks Hotel, and Myles Docker – son of Danny Docker, holds the Orchard Tavern, in Chatswood.
Michael Wiggins is proprietor of the St George Hotel, and former owner of the Royal Exhibition Hotel and Oxford Hotel Drummoyne, the latter sold to Arthur Laundy mid-2019.
“We’ve got a great deal planned for this aesthetically magnetic property, but everything we do will be designed to only strengthen the relationship the business has enjoyed with the local community for decades,” says Wiggins.
“It really is an extraordinary looking property, and has great scope for repositioning.”
The sale on behalf of hotelier Kent Walker was through HTL Propety’s Andrew Jolliffe, Dan Dragicevich and Sam Handy, who speak of the competition exhibited throughout the sale process, which attracted a broad spectrum of interest and generated multiple offers to purchase.
A steady influx of new buyers, often in the form of new groups or incoming investment, is thought to be the driver behind the relative lack of big-player dominance seen in pubs, as compared with other sectors.
“These guys aren’t new entries, but it’s great to see this kind of new partnership being formed,” says Dragicevich. “Historically some great partnerships and success stories have come about in pubs when mates join together to pool their collective resources.”
Reporting a high-paced eight sales in as many days, the agency believes owner-operators still maintain a lion’s slice of the pie.
“Notwithstanding the contemporary volume of sales reported, the industry remains hugely fragmented, and it is our submission that those that act strategically and with purpose during this time will be beneficiaries of sustainable portfolio augmentation for years to come,” furthered Jolliffe.
