The Paradise Valley Hotel freehold going concern has been sold in a classic perpetuation of Victoria being the tightest market in the country.
The Hotel is set on a big 9,916sqm block, offering a large public bar, TAB facilities, commercial kitchen and bistro seating 200, outdoor deck, beer garden and drive-thru bottleshop. It’s licensed until midnight, with patron capacity of 1,141.
Clematis is in the Dandenong Ranges region, known for the Puffing Billy Steam Train, Botanic Gardens and Sherbrooke Forest, just over 60 kilometres from the Melbourne CBD. The area sees in excess of 4.5 million tourist visitors each year.
Agents report the sale campaign yielded over 65 enquiries, with the vendors, Peter Doyle and family, looking to offers over $3 million for the regional asset.
The Paradise has now found new home with an unnamed syndicate of buyers with connection to the area, who have already negotiated its operation to be taken on by “an experienced Melbourne hotelier”, not yet revealed.
“This strong result is evidence of the appetite out there for freehold hotels on large parcels of land in tourism areas,” notes CBRE Hotels’ Mat George.
As one of the most compact and developed States, with nowhere particularly far from the influence of the capital, Victoria typically leads the country in yield compression in both metro and regional transactions.
The past 18 months has produced 19 pub sales worth a total of $110 million, with seven of these, totalling $45 million, located outside of Melbourne.
“Quality opportunities very rarely get sold, and if they do, it’s even more rare for them to be advertised on the open market,” suggests George. “Multiples have increased for venues that are proven performers or possess real upside.”
Contributing to the scarcity is the continuing rise in land value, potentially prompting better use for the property, or higher occupancy costs.
“Present owners of well-located and contemporary establishments are reluctant to sell these days citing that high barriers of entry to get back in are making it a very difficult decision.”