Listed pub landlord HPI has put up a long lease on the extra-large-format Acacia Ridge Hotel in the Brisbane suburbs.
Built in the 1970s by Castlemaine brewery, the pub was originally used as a warehouse for distribution. It counts a large-format drive-through bottleshop, multiple bars and conference facilities, 34 motel rooms and 190 car parking spaces.
It resides on a massive 15,652sqm (1.56-Ha) block, with 56 metres of frontage on arterial Beaudesert Road.
Acacia Ridge is a thriving residential and semi-industrial precinct, with 14 Top50 ranked hotels in the same LGA.
The pub also counts three detached bottleshops, at Sunnybank, Acacia Ridge and Coopers Plains.
Mid-2020, at the height of the pandemic, White & Partners sold the freehold component of the Hotel to the publicly listed Hotel Property Investments (ASX:HPI), with agreement to continue to manage the pub for the new owners in the short term.
Offered now is a 12-year tenant-friendly lease, with five 10-year options and fixed yearly rental increases. The lease began when the freehold was sold.
White & Partners applied $2.5 million in CAPEX in 2019, upgrading facilities and consolidating the Acacia’s reputation as the State’s largest gaming hotel.
It currently reports monthly gaming turnover averaging more than $7 million through its 45 EGMs, despite slipping from Top5 to Top20 in the past year, whilst under full management. The gaming operation enjoys approved trading until 4am seven days per week.
The floorplan of the pub remains highly underutilised, with several bars and other areas not even being opened to the public. The bistro seating is woefully inadequate, currently serving only around 40 people, while it could easily be expanded into the function space, made for 600 pax and mostly unused.
The Hotel benefits from a strong blue-collar base, as well as the increasing desirability of residential property in the area. This plays into immediate upside levers in the gaming, conference, function, food and bar trade.
Sources suggest the long lease will see sale price of circa $10 million.
It is being marketed by HTL Property’s Andrew Jolliffe, Glenn Price and Brent McCarthy, who note the scarcity of comparable operations.
“Sophisticated hoteliers from across Australia understand the rare nature and availability of a hotel operation such as this, hence [we] anticipate particularly strong interest in the asset,” offered Price.
“The national footprint of gaming hotel operations remains tightly held given the patent ability of this most resilient industry to overcome the hurdles that 2020 and CV-19 challenges visited upon it,” added Jolliffe.
The leasehold interest of the Acacia Ridge Hotel is being sold via Expressions of Interest, closing Thursday, 20 May.
