A Star of the state’s central west has come to market with generational owners joining with thriving leaseholders to offer the freehold going concern to market.
The large format Western Star Hotel is considered an institution in the burgeoning Evocity of Dubbo, around five hours’ drive north-west of Sydney.
Set on a prominent 1,959sqm block on bustling A39 (Erskine Street) through town, the two-storey brick hotel sports decorative iron lacework balustrades on the upper level and classic green tiles at street level. It provides a public bar and modern dedicated TAB and KENO area, gaming room with 15 PMEs, kids playground, and expansive, versatile function space upstairs.
Its diversified revenue sees a weekly average circa $65,000, while upside remains in the Band 2 gaming operation, with 11 of the machines in a smoking solution. The market for comparable assets should see The Star fetch offers in the upper $7 million range.
The Ashley family has owned the title to the Hotel for 32 years, with operations in recent times though a lease to Nelson Kelly and Nick McKechnie’s MPK hotels, which counts a half-dozen pubs in western NSW and still has The Star in its eyes.
“We’ve grown up in Dubbo and have always loved The Star, so when the opportunity came to lease it, it was a no-brainer,” says Kelly.
“The greatest value is in owning and operating a hotel like this, and anyone interested in this needs to know they’ll be bidding against us.”
While the current arrangement has proven successful for the Ashleys, “current market forces” motivated them to look at a sale, inviting their established tenants to join them to allow offer of the freehold going concern.
“The Star has been an outstanding investment for our family over a long period of time, which is why the pub has not been on the open market for over 30 years,” explains Nathan Ashley.
“It is currently in great hands and our partnership with Nick, Nelson and MPK remains strong.”
The Ashley family also owned the Amaroo Hotel in Dubbo in the 90s, and opted to engage Leonard Bongiovanni of Manenti Quinlan in conjunction with Nick Butler of Pub Brokers & Advisory to market the re-stapled asset.
“Manenti Quinlan has enjoyed a long association with the Ashley family and their hotels in Dubbo,” says Bongiovanni.
“We anticipate a great result based on the quality of the Hotel and the scarcity of these assets in the current market.”
Butler suggests a cosmic confluence has brought such as box-ticking asset to the fore.
“It’s very rare that the stars align like this, where landlord and tenant agree to take a large, profitable hotel to market together.
“Buyers are regularly listing size and scale amongst the most desirable qualities in their search for hotels and The Star has these in spades. It’s a terrific pub in a growing regional city – ripe for an owner operator to carry on its current trajectory.”
The Western Star Hotel Dubbo is being sold via Private Treaty.
