The burgeoning Dixon Hospitality Group (DHG) has swooped on two more Melbourne pubs as it continues to optimise its portfolio.
The Middle Park Hotel is just a couple of kilometres due south of Melbourne’s CBD, and the Newmarket Hotel is in adjacent St Kilda, both on Port Phillip Bay.
Speaking to PubTIC, DHG director Mike Dixon says the geography of the two pubs, bought from Melbourne Pub Group, fits nicely with their plans.
“[They] are exactly in our model. They’re far enough apart to not compete, but close enough to suit our management,” says Dixon. “As a group, we’re very happy with the purchases.
“Both are icons of their areas with long-established clientele, although very different concepts.
“The Middle Park has more of an old English feel to it, with old fireplaces and good accommodation upstairs that enjoys 85 per cent occupancy. We’re going to bring in our executive chef to work on the food offering – we think there’s a fair bit of upside in that.
“The Newmarket was fully renovated a few years ago, and has a great indoor/outdoor feel, with a big courtyard and chic function bar upstairs. We’re going to add live music and focus on events and functions.
Dixon says he is capitalising on the synergies of the growing portfolio, and is holding off plans for level three of the large-format Vincent Hotel – purchased in May – with thoughts of emulating the accommodation success of the Middle Park Hotel.
“The Vincent is just two minutes from the beach, and could offer 12 or 13 rooms upstairs.
“Like the Middle Park, it is only a short tram ride or driver from the city, and we see customers going for the more intimate, boutique and customer-focused accommodation options around town.”
The hotels were sold off-market through Scott Callow of CBRE Hotels.
While Dixon and CBRE would not disclose specifics on price, DHG reports a policy of purchases within 5-times earnings, and conceded a “good deal on both” was achieved.