Investors and hoteliers are pushing top-dollar prices for strong assets in regional hot-spots, as hungry capital eyes the booming Australian hotel market.
The freehold has been sold of the Grand Hotel in Armidale – a major locality in the New England region, with a population of circa 25,000.
Built in 1921, the prominent brick Hotel is on a 1667sqm corner lot close to the CBD, industrial area and hospital, with around 56.1 metres of street frontage. It provides public bar, bistro, gaming room with five machines, beer garden, and onsite parking for 22 vehicles.
The business was sold to Goodtimes pub group in early 2021. Vendor on the freehold sale was Steve McEvoy, who separately holds a stable of freehold investment hotels on the NSW mid-north coast.
Beating out the competition, the buyer is a newly-formed partnership between Harley Payne and his son, Tom Payne, who are the highly-regarded owners of Armidale’s St Kilda Hotel, just eight blocks to the east.
“We are delighted with the acquisition and feel it will be a good long-term investment for our family,” says Tom.
“Obviously, we have the capacity to run the venue in the future should the opportunity arise, however right now we are very comfortable with the current passive rental return.”
The hotel is currently producing just over $109k in annual rent, representing a yield on the investment of circa 5.15 per cent with a scheduled rent increase mid-2022.
Sale price was bolstered by the underlying asset value of around $3 million, in the PMEs, land and building, and was reportedly in line with the advertised expectation.
It sold within the first week of the EOI campaign through HTL Property’s Xavier Plunkett and Manenti Quinlan’s Leonard Bongiovanni.
“The purchaser was attracted to a combination of the stable and secure rental income, the underlying asset value, the geographical proximity to their current assets in Armidale, and the positive economic sentiment enjoyed in the region,” suggests Plunkett.
It continues a bumper period in the region, seeing $110 million worth of pub sales in the past 18 months alone. Last year, after Goodtimes in February, the Whitebull was sold to the Knox family in July, the Royal Hotel Armidale was sold to the Roche Group in August, Matt Coleman bought Armidale’s Imperial Hotel lease in September, and the town’s Railway Hotel sold in November.
The better part of a thousand kilometres to the south, the freehold of AVC’s Beer Deluxe – aka the New Albury Hotel – has just come to market.
An iconic local landmark, the large-format pub spans over five levels, in the heart of the Albury CBD. The regional Evocity boasts population around 100,000, across Albury-Wodonga.
Beer Deluxe occupies a big 2,013sqm block with rear lane access and parking. Sale includes the hotel licence and 15 gaming machine entitlements.
It is tenanted by the second-largest pub group in the country, Australian Venue Co (AVC), paying annual rental of $540k plus GST and outgoings, and likely to draw strong buyer competition.
The freehold of Beer Deluxe Albury is to be sold through Manenti Quinlan via onsite auction, on Friday, 18 March at 3pm.
