Kent Walker and family have listed their big Raby Tavern in booming Campbelltown LGA to focus on other acquisitions.
The Tavern is the only pub in the catchment of Raby, with 20,000 residents, between Ingleburn and Campbelltown.
It forms part of a mixed-use commercial property of more than 8,000sqm, counting the Raby Tavern and a collection of retail businesses, paying rent to the hotel.
The Raby offers a range of facilities, including gaming operation with 28 machines.
The Walkers have owned the freehold operation for over 16 years, with a licensee GM in place the entire time.
ALH’s nearby Lockies Hotel at Leppington has enjoyed major increases in trade and gaming stats since the Silverdale land release and residential development began taking residents.
Raby Tavern is somewhat overdue for strategic capex, and despite being a consistent Top200 gaming operation, only 15 of the EGMs are in smoking solution, and signage and access could be revised.
The recent retirement of their long-standing licensee, coupled with the potential being realised in the region, has prompted the family to divest the non-core property.
Its low-hanging upside and broader opportunities bring price expectation for the Tavern and retail centre of north of $30 million.
“We’ve seen the market respond deliberately, and repeatedly, to AAA-grade hospitality-indexed property investment opportunities, particularly when combined with the opportunity for annual value accretion through either, or both, property growth or improvement,” notes HTL Property’s Dan Dragicevich, marketing the hotel with colleague Andrew Jolliffe.
The sale campaign closely follows transaction of the Allawah Hotel by JDA to Justin Hemmes for $34 million, around 35 kilometres east of Raby.
Marketing literature suggests projected returns circa 25pc on capex investment in assets such as the Raby, and even as true metro hotel properties are seeing yields contract even below the 8.1pc average of FY19, as an investment the hotel sector continues to stand well above ongoing cash returns.
“Importantly in the case of the Raby Tavern opportunity, the investment enjoys diversified profitability from a combination of historical hotel trade, natural commercial property value enhancement and retail revenues from the property’s numerous rent-paying tenancies,” added Jolliffe, HTL’s Asia-Pacific director.
The Raby Tavern freehold going concern and retail centre is being sold via Expressions of Interest, ending at latest 20 November.
