Another of the distressed Public Hospitality portfolio has sold, seeing Paddington’s long-standing ‘Three Weeds’ sold to an unnamed “private investment syndicate”.
The former Rose, Shamrock and Thistle, more commonly known as Three Weeds, is one of the precinct’s historic pubs, first opening on the present 536sqm site in 1884.
The current four-storey Art Deco hotel replaced the original building, which was demolished, in 1939. More recently it has been named El Primo Sanchez.
On the border of Darlinghurst and Paddington, it is proximate to St Vincent’s Hospital and the Verona Cinema, and within walking distance of Allianz Stadium, the SCG, Entertainment Quarter and Hordern Pavilion.
It was vacant for years before banker turned hotelier Jon Adgemis bought it in 2022, along with the adjacent Arts Hotel – relaunched as 65-room boutique hotel Oxford House – as part of ambitious plans to increase valuations through renovations based in activating unused accommodation.
Public Hospitality secured a DA to convert the upper floors into 22 accommodation rooms with ensuites. There was further scope for a rooftop space (STCA), such as seen at the nearby Light Brigade, Hyde Park House and East Village hotels.
However, deep into big-ticket redevelopments at multiple sites, Adgemis’ plan went sour as interest rates rose and construction costs ballooned, necessitating expensive refinancing through multiple non-bank lenders to service debts and continue works.
But the burden of incomplete pubs that could not trade proved too much, and in Q2 of 2024 Australia Pacific Mortgage Fund (APMF) took back both El Primo and the Kurrajong Hotel, in Erskineville.
The following month the Paddington local was put to market through HTL Property’s Andrew Jolliffe, Dan Dragicevich and Sam Handy with price expectation of circa $20 million.
Its sale now, after 12 months, is reportedly to a syndicate of private investors, and while agents were not prepared to disclose details on the purchaser or price paid, it was revealed the “transaction metrics mirrored those provided” during the sale process.
After the subdued sales activity of 2024, now seeing a backlog of buyers since interest rates turned the corner and finally began to ease, Jolliffe suggests the Paddington pub is “another in a long line of transactions triggered this calendar year by the confluence of compressed debt pricing, and strong mixed revenue generation”.
