High-profile hotel group Redcape has listed two of its large-format pubs, The Shamrock and The Grove hotels in Mackay, as it shores up the balance sheet to overcome hurdles and pave the way for future moves.
Formerly the Andergrove Tavern, The Grove occupies a 1.96-ha site incorporating public bar, bistro, gaming room with 45 Coastal authorities worth around $8 million, drive-through bottleshop and function spaces, reporting robust weekly revenue of circa $200k.
Around 10 kilometres south, across the Pioneer River, the Shamrock is set upon 11,442sqm over three titles. It reports diversified weekly income in excess of $320k across key departments, including public bar, bistro, 40 Coastal gaming authorities, accommodation and retail.
Redcape has invested in the gaming operations and further function options at The Grove, which is expected to benefit an incoming operator.
They are the two highest-performing gaming pubs in Mackay, the Shamrock ranked #76 and The Grove #94 in the state.
Redcape owns and operates 35 hotels, worth a total of more than $1.4 billion, generating revenue in FY23 of $384 million, achieving EBITDA of $78 million.
“As we have demonstrated in the past, a key strength of the Redcape Group is the ability to leverage the depth and quality of the portfolio to selectively recycle capital through successful divestments,” offers group MD Chris Unger.
“Fuelled by an amazing team of people, both The Grove and Shamrock have performed strongly for us over many years providing all-encompassing hospitality experiences for their communities.”
MA Financial owns 39 per cent of Redcape and steered the previously ASX-listed fund off the exchange in September 2021, with shareholders hoping to achieve higher valuations outside public scrutiny in a portfolio seen as heavily reliant on gaming.
Last month MA Financial froze investor redemptions until at least the end of the year as it seeks to improve the balance sheet and raise capital, citing “deteriorating consumer confidence” creating volatility in the venues’ performances.
There are questions as to whether MA should be charging fees as it follows suit in freezing quarterly redemptions, the fund explaining such a move has been done by Lendlease and more recently by Charter Hall, and that it is actively looking for more assets to strategically offload.
The Mackay sisters are expected to achieve sale price together of more than $50 million and follow the group’s recent sale of the Aspley Hotel, in Brisbane’s north.
Found 950 kilometres north of Brisbane, Mackay is Queensland’s fourth largest regional city, counting 118k residents and employing over 47k. The city boasts continued diversification beyond mining, with only 5.5 per cent of employment now derived through mining.
The group notes the prospects of pub assets, enjoying the attentions of key stakeholders in both operations and lending. Comparable FNQ pub the Gracemere Hotel in Rockhampton sold last month to a NSW syndicate headed by Sean O’Hara for $22 million.
Redcape has appointed HTL Property and JLL Hotels to steer the divestment campaign, in what is deemed “a robust and still particularly fertile transaction platform for cross border investment by both corporate and private entities,” suggests HTL MD Andrew Jolliffe.
The Grove and The Shamrock freehold going concerns are being sold separately or in one line, via Expressions of Interest, concluding Wednesday, 13 September.
