Stalwart of Wagga Wagga hospitality, Romano’s Hotel, is being offered for sale amid high demand and unrealised opportunities in regional strongholds.
After unsuccessful attempts by long-time operator John Hussey to sell the asset in 2015 and 2016, Hayes Advisory was appointed administrator in June 2016.
Hayes kept the hotel trading and rekindled negotiations with all previously interested parties, leading to exchanged sale contracts in July 2016 to a private consortium.
The new owners promptly spent $1.6 million on a strategic renovation and refurbishment of the ground floor and first floor function rooms.
Built on a 2,189sqm block, Romano’s features a bar, bistro with street-side alfresco dining, gaming room with 15 EGMs, and beer garden, under a 3:00am licence. Upstairs are function rooms with a dedicated kitchen.
The pub also holds redevelopment upside, through its B3 Commercial Core zoning and 16-metre height approval, and is adjacent to the newly-approved Riverside Wagga Wagga development, comprising 67 apartments across 17 levels.
Significantly, the first and second floors contain 45 pub-style accommodation rooms that are currently not in use. The rooms comply with all necessary council and fire regulations, and are said to be in “reasonable” condition, although will require capex to be competitive with what is on offer in the area.
The current owners planned to activate the accommodation rooms as part of the second stage of refurbishment.
To date the changes have proven well-received by the patronage, the pub now reporting annual revenues of around $3.2 million.
The consortium owners are said to have individual investment strategies, and citing multiple unsolicited approaches to acquire the asset over the last six months, a collective decision was made to “test the market” with a formal sales process.
“Strong trading conditions, a low interest rate environment and debt liquidity are aligning with the investment timelines of some of the shareholders within our group,” offered Gareth Collins, one of Romano’s Sydney-based owners.
It comes as metropolitan publicans increasingly look to powerhouse regional centres such as Wagga Wagga for acquisition opportunities, with higher yields and typically larger footprints than that being fought over in the capitals.
Sources suggest the revived Romano’s should see sale price circa $7 million.
The investors have engaged HTL Property’s Blake Edwards and Sam Handy to steer the sale campaign, which they suggest will be one of the most sought-after regional opportunities of the year.
“We anticipate there will be a mixture of local interest, buyers from some of the larger surrounding regional centres and most definitely from Sydney,” says Handy.
“Unequivocally, there won’t be another regional pub with these core trading attributes and this level of upside coming to the market in the foreseeable future.”
