The Kelly family has divested one of the Eastern suburbs’ best-loved pubs to a brand new operator group, headed by the next generation Waugh.
Paddington’s Royal Hotel, built in 1888, is a cornerstone of local hub ‘fiveways’ and recently underwent a $4 million renovation, adding a rooftop bar overlooking the Sydney skyline and a refreshed food & bev offering to bring it in line with the standard for the area.
The purchasers are the newly-formed Public House Management Group (PHMG), led by industry heavyweight Mitchell Waugh. PHMG was incorporated in May and within weeks tempted Mosman’s Buena Vista Hotel from Halcyon for $16 million.
While the sale price was not revealed, the AFR reported the transaction as $15 million.
This time PHMG enticed the Royal from the Kelly’s Newhaven Hotels, which was also the vendor of the Buena Vista to Halcyon for $13 million only 12 months prior.
Waugh told PubTIC he was very pleased with the acquisition – both for himself and on behalf of PHMG, which he says will be aligning itself with strong hotels with “roots vested in the community”.
“[PHMG’s] investors are looking forward to reinvigorating both the Buena Vista Hotel in Mosman and the Royal Hotel in Paddington in the coming months,” said Waugh.
“We’re multi-generational hoteliers who have been actively watching the market for blue chip opportunities. We have a stable of private investors who, like us, are keen to grow our hotel group platform and position our vehicle for the next ten years.
“It’s an exciting time.”
The off-market campaign was conducted by Ray White’s Joel Fisher and Andrew Jolliffe, who have been instrumental in a string of high-profile deals this year.
“We’ve represented some significant hotel industry families over the past few months, including the Bayfields, the Feros, Haritos and Medich families, and we are delighted that the Kelly family have also engaged us to deliver a strong outcome for them in relation to this sale,” said Fisher.
Jolliffe observes that investment capital and market conditions are still driving premium results for hotel vendors.
“This market is continuing to improve with all key investment indicators promoting confidence in the sector. Liquidity and accessibility to well-priced debt markets, relative clarity around the legislative horizon and strong revenue attraction across all profit centres makes for some compelling investment arguments.”
The exact structure of PHMG and its relationship with Waugh Hotel Group are still being finalised. The Group will commence operations in August when it takes possession of the Buena Vista.