The freehold interest of Redcape’s Cedars Tavern has hit the market as the owner looks to expand his operational portfolio.
Amid a distinct shortage of such freehold investments, the sprawling 12,010 m² plot in Emerton houses the top-50 gaming pub and a McDonalds.
Redcape is arguably the country’s top gaming operator, holding the NSW #1 and #5 venues, and last year taking Group Operator of the Year at the AHA NSW Awards for Excellence. Cedars is leased with options until 2052.
While such freehold passive investments are dominated by venues leased to Woolworths’ ALH and Coles’ Spirit Hotels, the covenant is on par as the New York hedge funds-owned Redcape continues to be a frontrunner and news in the industry.
Cedars Tavern is being marketed by CBRE Hotels for vendor Jim McGrath, who owns several other pubs in Sydney and sources say he wants to free up capital for opportunities in a hot market.
CBRE national director Daniel Dragicevich told PubTIC the opportunity will no doubt appeal to plenty of investors in the current climate.
“The passive hotel investment market – like the wider pub market in general – is experiencing a compression of yields, as purchasers are drawn to the stability of long-term fixed returns and value underlying property fundamentals.
“We expect significant interest also for the fact that high quality hotel investments in the Sydney Metro area have been in very short supply, with Queensland and Victoria the dominant marketplaces historically.”
Emerton, near Mt Druitt in Sydney’s greater west, is on the fringe of the rapidly developing North West corridor. The Cedars site is beside the Woolworths-anchored Emerton Shopping Village.
The property is being sold via an Expressions of Interest campaign, closing Wednesday 20 April.