Ben McBeath’s colourful Arthouse Hotel operation in the Sydney CBD has been sold to MA Financial Group’s Redcape Hospitality.
The handsome two-storey sandstone former gallery, set prominently in The Galleries retail precinct on Pitt Street, was redeveloped as a hospitality venue in 2000. The freehold is owned by Vicinity.
Surrounded by commercial office towers, retail, accommodation hotels and public transport infrastructure it sees very high pedestrian foot traffic.
One of the largest pubs in the CBD, its expansive footprint across multiple levels has capacity for 900-pax, offering four bars, gaming room with 21 machines, two kitchens and two restaurants, an outdoor courtyard, and functions and event spaces.
It recently underwent an extensive $3 million renovation and has a 24-hour licence, able to trade until 5am, although it has rarely stayed open past 1am in recent years. Annual revenue is reported at approximately $8 million.
The McBeath family has held the leasehold since its conversion, with fifth generation hotelier Ben McBeath moulding it into a Sydney institution through several configurations.
“We are so happy that the Arthouse has been picked up by Redcape, a group with a reputation for looking after their staff, which, after 26 years, was so important to us,” he says.
Sydney’s Midtown precinct is experiencing significant expansion, seen in the ANZ Tower development at Liberty Place and opening of the Gadigal light rail station, generating high occupancy rates and an increase in the already high pedestrian traffic.
Redcape continues its portfolio reshaping that has seen it divest some of its large-format assets, such as sale earlier this year of Bankstown’s South Terrace Hotel to Oscars for $54 million and that of the iconic Beach Hotel in Byron Bay to the Didier family in 2025.
The new direction has seen the group push into Queensland, as seen in acquisition of four Maeva Hospitality pubs early 2025 for around $80 million, and last month’s purchase of the Entrance Social Club Hotel from Thomas Hotels for $36 million.
And Redcape has increased its presence in the Sydney CBD, first picking up Gallagher’s Criterion Hotel in 2025, just a block from the Arthouse, and this month the Frisco Hotel in Woolloomooloo.
The group’s collection counts nearly 40 pubs and hotels across NSW, Queensland and Victoria, and while several in the Sunshine State are leaseholds it held only two in NSW, including the Criterion.
It has now paid about $7 million for the leasehold interest in the Arthouse, which is consistent with price guidance, with 10.5 years remaining as the precinct sees major development and the Criterion has reportedly never traded better.
“We’re very excited to bring the institution that is the Arthouse into the portfolio and think it represents outstanding future value for us,” says Redcape MD Chris Unger.
“Our business model is perfectly suited to continue its growth in a flourishing pocket of the city. The Arthouse puts icing on the cake on what has been a record financial year for Redcape and we’re well placed to see that continue into the next one.
“We wish Ben all the best after 26 years and we’re looking forward to working with the team.”
McBeath relocated to Newcastle, where he is rearing four kids and trying to centralise his interests. After more than a quarter century and what he described as a “perfect storm of reasons” he sent the Arthouse business to market in April in an EOI campaign through HTL Property’s Dan Dragicevich and Sam Handy.
Marketing cited the opportunity for the incoming to own six of the 21 gaming entitlements, and potential upside in relocating the room for a smoking solution. The site, designated Green zone, is proximate to several strong-performing rooms.
McBeath still holds hotels including the Great Northern in Newcastle, close to the family’s origins in the game, the Hunter Valley, and says he will look for another hotel “closer to home”.
The NSW market is seeing strong demand for high yielding leasehold assets, particularly in the current elevated interest rate environment.
“Opportunities of this scale and strategic accessibility within the Sydney CBD are exceptionally scarce,” notes Dragicevich.
“The Arthouse has one of the larger footprints in the burgeoning Midtown precinct giving it a competitive advantage and levers for future earnings growth.”
