The sun has set on pub operator Virtical’s portfolio, with a successful sale of Hotel Australasia to another hospitality developer.
The picturesque heritage-listed Hotel is a landmark of Eden, on the NSW south coast, built in 1904, with 38 metres of frontage on a 2,886sqm lot.
It was the first pub bought by hospitality investor and developer Virtical, then known as Core Asset Development, which paid $1.65 million in early 2022.
The group is understood to have spent circa $3.5 million on an impressive restoration and refurbishment, and after more than a decade closed, the hotel began trading again in December 2022. It offered eight accommodation rooms, in a precinct enjoying high demand but lack of supply.
But in the second half of 2024 Virtical came under increasing scrutiny, after failing to settle on its purchase of Kinselas and the Courthouse Hotel, in Taylor Square, from MA Financial, with the NSW Supreme Court later ruling it to finalise the deal.
An expose by the Australian Financial Review revealed an investigation by the Australian Taxation Office regarding more than $100 million claimed in GST refunds.
As Virtical also failed to settle on its proposed purchase of the Metropolitan, receivers were moving in, snatching back the group’s flagship Republic Hotel near Circular Quay, sold to the Thomas family.
Works at the Australasia remained incomplete, and barriers prevented patrons accessing some areas.
In November Bond Finance, Virtical’s primary financier on the property, called in receivers and administrators, Andrew Cummins and Peter Krejci of BRI Ferrier, to take control of the group’s first-in-last-out pub asset.
A sale campaign on the hotel, beneficially located between the NSW, Victorian and ACT capitals, and a destination for dozens of cruise ships annually, spoke of scope for a buyer to enhance the outdoor area and potentially extend the trading area to make use of surplus land (STCA). An incomplete DA posed to create an outdoor kitchen and bar, plus retail shops.
The hotel was said to have been generating annualised revenue of around $2 million at the time of sale.
The Sapphire Coast pub has now been purchased by developer Lyon Group, founded by the late Bruce Lyon, for circa $5 million. The company has other existing hospitality assets, with the Sea Horse Inn and Boydtown Holiday Park, opposite Eden on Twofold Bay, as well as a Mercure Hotel in Townsville.
It is also working on development projects in western Sydney.
Becoming the first prominent pub transaction for the new year, Australasia was sold through HTL Property’s Sam Handy, Blake Edwards and Ben Kennedy, who report “numerous offers” submitted, stemming from the likely places.
“As anticipated, the Hotel Australasia attracted interest from food and beverage operators from Sydney, Melbourne and Canberra,” explained Handy.
Other recent south coast sales have included the Ocean Beach Hotel at Shellharbour, sold to Chris Feros, and Central Hotel, also at Shellharbour, sold to Redcape.
