Gallagher Hotels has offloaded the gaming-focused Triple 8 Hotel in Chinatown to the ever-active Oscars Hotels.
Patrick Gallagher bought the operation with a seven-year lease in 2015 from Iris Group for circa $7.25 million, representing the two businesses’ fifth asset transfer, and not their last.
Located in Dixon Street Mall, the Triple 8 is within a strata title, holding over 700sqm on a single level. It has the uncommon benefit of the lessee owning both the hotel licence and the 30 gaming machine entitlements.
Bill and Mario Gravanis’ Oscars Group employs a similar approach to Gallagher, maintaining a diverse mix of lease and freeholds, and both large and small operations.
Busy juggling new challenges such as the purchase of the Chelsea Hotel in Chatswood from Solotel, Gallagher says the off-market sale suits his plans.
“We have some other exciting areas to redeploy the capital, and decided to sell when the opportunity arose,” he says.
“It’s been a great business for us and so easy to operate, and we wish Oscars every success with it moving forward.”
Variations mean there is only three years remaining on the lease, and sources say the operation transacted for around $5.5 million.
Oscars is understood to be eager to renew the lease agreement, but if unable will have the option to relocate the licence and gaming, or shift some of the entitlements to other pubs it runs that don’t have their full complement.
The sale was conducted through JLL Hotels’ national director John Musca, who suggests the $100+ million in off-market hotel transactions and agreements JLL holds demonstrate that off-market continues to be a popular method of sale.
“Hotel opportunities in Chinatown are scarce to say the least, and with an optimal one-bar efficient layout and sought-after business mix, the proposition was very compelling in this demographic location.”