Pub sales reach $100m as old-time operators flood back in
Pub operators and investors are rolling back into the sector, with close to $100 million in sales completed in the past few weeks.
After a slow sales patch, buyers are taking advantage of pub patrons keen to socialise, watch sport and have a meal at their local watering hole. Investor interest is being spurred by the possibility of stage 3 tax cuts revitalising household budgets and a lack of investment opportunities in other property assets.
The Prince of Wales Hotel in St Kilda is for sale.
While sales are busier in Sydney, the tightly held Melbourne market has also seen some deals and new listings. These include the Prince of Wales Hotel, back on the market with a discounted price tag of $30 million, and the Buxton Group snapping up the Marine Hotel in Brighton, paying a bumper $22.65 million for the land-rich pub in April.
The four-storey art deco Prince of Wales in St Kilda hit the market last year with an expected price between $45 million and $50 million, but failed to find a buyer.
In Sydney, private investment group Tricon on Wednesday completed a deal to buy the large-scale Lansdowne pub on the city’s fringe for about $20 million after a year of negotiations.
The 506-square-metre site in City Road, Chippendale, with its large-scale entertainment floor, is a popular haunt for nearby Sydney University students and lovers of live music and pub rock.
The pub was a victim of Sydney’s 2015 lockout laws that stopped patrons entering venues after 1.30am, prompting its closure. It reopened two years later when the team behind Newtown’s Mary’s Burgers took over the reins, but closed again in February 2022.
HTL Property’s Sam Handy, Andrew Jolliffe and Blake Edwards sold the pub with Stef Ippolito from IB Property in what they said was a highly competitive sale process. “The new owners have wasted no time in repositioning the business by way of leasing it to Melbourne-based restaurateur Julian Romero in April of this year,” Jolliffe said.
Romero owns a handful of successful Mexican restaurants under the Happy Mexican moniker and has started a similar concept at the Lansdowne. The pub will retain its live music focus.
Jolliffe said impending stage 3 tax concessions and stable interest rates, coupled with the sale of numerous hotels nationally, “suggests to us a strengthening of key actor sentiment in the broader hotel industry”.
Long-term pub barons Arthur and Stuart Laundy are boosting their portfolio, purchasing the Light Brigade hotel in Sydney’s eastern suburbs for $20 million. HTL Property also advised on the sale.
The Laundys bought the prominent four-storey corner site on Oxford Street from the Bayfield family who had owned it since 2015. Stuart Laundy said they were drawn to the location because it’s at the “Woollahra end of Paddington, so draws from both suburbs”.
“The AFL angle to it was something new and fun to explore given that we’re [NRL] leagueys with the [Canterbury] Bulldogs and Dad is great mates with several AFL players, including the older greats like Steve Silvagni, who played for Carlton,” he said. The pub is frequented by AFL fans intent on watching their teams play in Sydney.
“It’s local to me and my daughters love it, and it has the best rooftop bar I’ve seen in Sydney.”
Laundy said he will look at some of the food offerings “down the track”.
Other eastern suburbs venues owned by the Laundys are the Watsons Bay, Bells and Woolloomooloo Bay hotels.
“A few generations ago our family owned the Woollahra Hotel, and my father played rugby down at Easts; so I’m looking forward to a long association with a part of Sydney we love and know well,” Laundy added.
“When fourth-generation hoteliers buy from fourth-generation hoteliers, it says something patently clear about the longevity and strength of an asset class,” Jolliffe said.
“We’re buoyed by the traction enjoyed by the recent Light Brigade hotel sale and market depth for inner-city hotels such as The Lansdowne and others we are working with on an off-market basis.”
The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.