Against the trend in a booming industry, the receiver sale of Lithgow’s Tattersalls Hotel has emerged, the neglected property and stalled business heading to auction.
The freehold of the Tattersalls was bought around a decade ago by the incumbent, offering a strong yield based on unrealistic rent from the tenant. Settlement was swiftly followed by default by the tenant, who handed back the keys on the basis of it being unaffordable.
The two parties subsequently spent eight years battling their differences in court, with the tenant finally prevailing and winning $300k in damages. Failing to pay this, the landlord has been forced into administration and the asset listed.
Located on a big 1,780sqm block on Main St in the heart of Lithgow, adjacent to Woolworths, the pub incorporates a public bar, bistro, commercial kitchen, gaming room with 12 EGM entitlements (PMEs), and 24 accommodation rooms.
Lithgow is 140 kilometres inland of the Sydney CBD, and a traditional stop across the mountains. The region is benefitting from the huge and much-lauded Emirates Wolgan Valley development, and sees interest such as Oscars Hotels’ recent purchase of the Commercial Hotel.
Although the accommodation continues to trade, the Hotel does not, and the property is being sold as a freehold (vacant possession).
Ray White Hotels’ Xavier Plunkett, Blake Edwards and Andrew Jolliffe have been engaged to market the pub on behalf of Morgan Kelly and Ryan Eagle of Ferrier Hodgson, as receivers and managers of Gigi Entertainment P/L, for Bank of Queensland.
“The Lithgow Region benefits from close proximity to Sydney and the Blue Mountains and acts as a gateway to the entire central west agricultural region,” poses Plunkett.
“A large blue-collar worker base, major government employment opportunities, great connectivity and a relatively benign competitive landscape all bode well for the Lithgow hotel market.”
Beyond its blank slate, the Tattersalls offers upside in the form of a revision to the gaming room, applying a smoking solution and investing in new machines. Its facilities offer potential in improving the historic food & bev offering, and better use of underutilised aspects of the Hotel, including function spaces.
The underlying property value will certainly draw strong interest, as seen in sales of the proximate Hotel Blue in Katoomba and Imperial Hotel Mt Victoria – both trading at sub-five per cent yields.
Agents are anticipating a mix of investors, experienced operators and first-timers at the auction, where such opportunities typically perform well.
The Tattersalls Hotel at Lithgow will go under the hammer at the offices of Ray White* on Friday, 27 October.
*Ray White Auction Rooms: Level 17, 135 King Street, Sydney
