The unwinding of Jon Adgemis’ Public Hospitality group has further unfurled, with Annandale’s Empire and the South Bondi Hotel sold out of receivership again, along with Balmain’s shuttered Exchange.
Mid-2025 Millinium Capital, led by Tom Wallace – a long-time friend of Adgemis – signed to purchase the Three Weeds in Paddington, aka the Rose Shamrock & Thistle, for $20 million.
A couple of months later Millinium took on the vacant Kurrajong in Erskineville for around $11 million and Town Hall Hotel in Balmain for $9.5 million.
Former KPMG wheeler and dealer turned publican Jon Adgemis was attempting to build a major portfolio of undercooked pubs, hoping to invest and remodel them into profitable operations.
But the weight of debt and construction costs in the high-interest rate environment following the pandemic brought the dream back to earth. He was declared bankrupt with north of $1 billion in debts and in October last year Deutsche Bank stepped in and repossessed a large portion of the collection.
Receivers McGrathNicol were appointed to steer sale campaigns on the South Bondi Hotel, Empire Hotel and Exchange Hotel Balmain, plus Claridge House in Darlinghurst and Hotel Diplomat in Potts Point.
Adgemis’ Public had originally purchased the South Bondi Hotel, aka Noah’s Backpackers, in 2022 for $68 million and spent millions more toward transforming what was a 260-bed hostel into an upmarket beachside hotel.
At the start of this year Millinium came to the party again, buying both the Bondi backpackers and Diplomat Hotel, for roughly $60 million and $20 million, respectively.
But issues with settlement saw the proposed Millinium deal fall over in May and the company relinquished its deposits on the properties.
The assets were sent back to market and Bill and Mario Gravanis’ Oscars Group snapped up Hotel Diplomat for the same price paid by Millinium.
South Bondi Hotel and the Empire have now sold again.
ASX-listed Clime Asset Management (CAM) has similarly paid about $60 million for South Bondi and Vantage Point Asset Management (VPAM) has also shelled out $20 million for the Empire.
CAM reports $1.7 billion under management, and VPAM $2.8 billion. The companies already share interests in Adelaide’s $400 million Keystone tower and The Cliffs golf course on Kangaroo Island, in South Australia.
The two fund managers had previously backed Wallace, but VPAM head Paul Thomas says Wallace has “zero” involvement in the Public purchases, telling the AFR they won’t be working with him “going forward.”
Under consideration is whether to continue with plans to focus the South Bondi Hotel on accommodation or create a mix of rooms and apartments.
They see the two acquisitions as complementary and great assets that have “been sitting empty for too long” but Thomas stresses they won’t be replicating mistakes of the past by forming “some overarching empire.”
Also sold is the last of the five McGrathNicol assets, Balmain’s historic Exchange Hotel.
Built in 1885 in the Georgian style, with a distinctive wrap-around balcony overlooking Beattie Street, the multi-storey building lays claim to being Balmain’s largest pub.
Adgemis bought it in 2016 for around $5 million and PHG spent around $5 million on capital works, but it was not completed before disgruntled creditor Deutsche Bank took back control and sent it to market, in February.
All three of the distressed assets were sold through HTL Property’s Andrew Jolliffe and Sam Handy, who would not reveal the identity of the new owner of the Exchange but point to the sustained revenue being seen in domestic hotels despite “geopolitical turbulence” as the public finds solace in familiarity and simple pleasures.
“Investors and patrons remain in equal parts drawn by the magnetism of both the robust trading history, and the proud physical permanence of hotels such as the Exchange,” notes Jolliffe.
