Riversdale-operated Australian Pub Fund has listed its Brisbane behemoth The Elephant for sale as part of its “ongoing disposal strategy”.
The $300 million pub investment vehicle created by business moguls John Singleton, Mark Carnegie and Geoff Dixon, APF purchased the very large format Elephant Arms Hotel in early 2013 for circa $27 million, at the peak of the group’s acquisition phase.
It represented the first Queensland asset in the portfolio, operated by Riversdale with Paddy Coughlan as CEO, and was soon joined by the similarly prized Stock Exchange Hotel, just two kilometres south in the heart of the Brisbane CBD.
After an extensive eight-month makeover, the big boy of Brisbane reopened as The Elephant.
Guided by market conditions, in late 2016 APF looked to realise some of its investment gains in a strong market and listed two of the flagships, the Marlborough and Kinselas.
The campaigns were still active when news broke in early 2017 the group had divested a different three key assets for $48 million, with JDA taking the Peakhurst Inn, and Oscars both the Bristol Arms and Como Hotel.
Next came the Toxteth to Mitchell Waugh, then the Marly was subsequently sold to Solotel, Universal Hotels took Kinselas, and finally Merivale bought up the Vic on the Park.
It was looking like Riversdale may sell down entirely until in mid-2018 they took the title to Newcastle’s Lambton Park Hotel.
The portfolio remained at four pubs, including the two in Brisbane, until earlier this month when its Balmain institution the Unity Hall came up for sale.
The Elephant was built 1888 as the Prince Consort Hotel, replacing the previous Prince Consort Hotel built on the site c.1863. In 1992 it was listed on the Queensland Heritage Register.
Occupying 1,237sqm, it offers four separate bars, a large outdoor beer garden and a gaming room with 42 machines, opposite Fortitude Valley train station. The Valley continues to be one of the city’s hospitality hot spots, providing the likes of the popular new Fortitude Music Hall.
“Given the current low interest rates and the lack of quality stock on the market, we feel the timing is right to exit the property after seven years of ownership,” says APF director Matthew Beach.
The four-level structure’s best use will likely come with a commercial operator, and APF has appointed CBRE’s Paul Fraser and Jack Morrison in conjunction with JLL’s Tom Gleeson and Nick Butler to market the opportunity.
“The Brisbane near-city market has been starved of genuine mixed use, value-add opportunities in recent times, particularly those with the adaptability and flexibility offered by The Elephant Hotel,” suggests Morrison.
“The asset has a strong gaming room with 42 authorities and room for immediate upside with limited CAPEX requirements, including machine upgrades, TITO, and room for an additional three machines,” adds Gleeson.
Prospective buyers can consider acquisition of the asset as a freehold going concern, or with long-term tenant in place, via sale and leaseback. The AFR reports offers are being sought north of $20 million.
The Elephant Hotel is on offer through an Expressions of Interest campaign, closing 28 November.
