Less than two years after taking it on, Solotel has listed its lease at the Clovelly Hotel as it eyes other upcoming projects.
Bruce Solomon’s Solotel operates around two-dozen pubs, including big Sydney venues the Kings Cross Hotel, Golden Sheaf and Marlborough Hotel.
In recent years Solotel has extended its partnership with Matt Moran, Morsol, which has long operated the amazing Opera Bar.
Heralding a shake-up in the portfolio, the Group has sold three venues, executed significant renovations on another five, and opened six new locations, with more on the way.
“In the last few years Solotel has undertaken a strategic review that involves the rebalancing of our portfolio of hospitality investments,” offers Solomon. “We will be opening another two new venues, Chophouse Parramatta and The Abercrombie Hotel, in the upcoming months.
“The sale of the Clovelly business is part of this realignment of our strategic direction in hospitality.”
Contrary to a report in the Herald, Morsol did not pay $30 million for the Clovelly lease, but negotiated it on favourable terms with freehold going concern owner Iris Capital, in late 2016, paying $1.6m annual rent on an initial 10-year term with two five-year options.
And despite rumours, Justin Hemmes did not consider the purchase ahead of Morsol, as Merivale does not operate leaseholds.
But on the strength of the new tenant, JLL’s John Musca and Colliers’ Miron Solomons secured sale of the passive freehold for Iris to a private investor, under title of KD Holdings, for $32 million, representing a very sharp 4.7 per cent return.
Solotel has spent the past year and a half building on the Clovelly business, raising expectation in foodservice in particular on the back of the reputation of a celebrity chef.
Literally 50 metres from Clovelly Beach and about a kilometre from Coogee Beach, with C!nc’s iconic Coogee Bay Hotel and Hemmes’ amazing Coogee Palace, the right operator at Clovelly will likely thrive in what is one of Sydney’s unreplaceable beachside pubs.
“We can confidently attest to the continued and very deliberate interest by domestic and international groups seeking AAA-grade product by which to secure access to robust cash flow businesses,” furthers Asia-Pacific director Andrew Jolliffe, managing the sale.
The Clovelly Hotel leasehold interest is for sale via Expressions of Interest. Closing date not yet announced.