High-flying pub group Redcape “continues momentum” in its recent divestment program, with the big-ticket sale of its prized Mount Annan Hotel to an established Sydney hotel family.
Redcape de-listed from the ASX in September 2021, with shareholders hoping to achieve higher valuations and MA Financial retaining 39 per cent of the $1.4 billion portfolio.
At the start of the new financial year MA Financial froze investor redemptions until at least the end of 2023, seeking to improve the balance sheet and raise capital.
Holding 35 hotel assets, the Sydney-based group subsequently listed multiple venues in Queensland, quickly securing sales reportedly “ahead of book value”, including The Grove Hotel Mackay, then the Aspley Hotel and the Shaftston Hotel in Brisbane, as well as the Central Hotel in Shellharbour.
“We informed investors in July of our strategy to leverage the depth and quality of our portfolio to strengthen the balance sheet through selective divestment,” says Redcape MD Chris Unger.
The Mt Annan Hotel is on roughly 7,200sqm in Sydney’s thriving south-west. Built in the 90s, it keeps 30 EGMs, bringing Liquor & Gaming rank of 120 in the state, and reports average weekly revenue of $265k, across a strong mix of departments.
“Hotels continue to be a resilient asset class in today’s market, and we are seeing trading dynamics improve across our portfolio as pubs continue to be a popular choice for customers,” furthered Unger.
Located in a strategic position within the Mount Annan retail precinct, the Hotel benefits from organic population growth in the region, and patrons looking for full service family-friendly options.
With the sale comes an approved DA to renovate the entire structure, indicating clear upside opportunities in the growing precinct.
It has sold to an unnamed “highly regarded” family operator for circa $50 million.
The off-market deal was brokered by HTL Property’s Andrew Jolliffe and Dan Dragicevich, and thought to be the largest single asset pub sale for Sydney this year.
“Mount Annan Hotel represents an extremely rare opportunity to gain a large format trading footprint in a rapidly expanding corridor of South-Western Sydney,” says Dragicevich.
“Surrounding, prominent venues at Gregory Hills and Narellan provide a blueprint for its future earnings profile from an already strong and established base.”