NEWS PROPERTY

One of Victoria’s oldest running hotels, Craig’s Royal Hotel in downtown Ballarat is on the market for the first time this century. Built in 1853, early in the gold rush that transformed Victoria, the hotel was described by American writer Mark Twain as “the pride of Ballarat”. Current owners John and Mary Finning have decided to sell the hotel they bought 20 years ago. The hotel has been central to significant historical events, including a royal assassination attempt. The Melbourne Racing Club was established on the premises and the 1855 Royal Commission into the Eureka Stockade was held there. It gained the Royal moniker in the 1860s when Queen Victoria’s son Prince Alfred visited Ballarat and stayed at the hotel. (After Prince Alfred left for Sydney, he was followed by Ballarat local Henry O’Farrell who attempted to assassinate him.) JLL agent Will Connolly is marketing the hotel. Expressions of interest open on Wednesday, after Cup Day and close on December 5. Early interest in the 73-room property is at more than $13 million. “The buyer will be purchasing a brand rather than a hotel – perhaps someone who is looking for a flagship property for their portfolio,” Mr Connolly said.

The Moelis Australia-controlled Redcape Hotel Group has made its first divestment since its lacklustre listing 11 months ago after selling the St George Hotel in Sydney’s south-west for $47.1 million. The 114-year-old gaming pub on 1752 square metres at 618 Canterbury Road, Belmore, was bought by Michael Wiggins and Joanne Cassar who recently sold their Oxford Hotel Drummoyne for $41.75 million to Rich Lister Arthur Laundy’s Laundy Group. The two-level pub sold off market at a 2.7 per cent premium to its book value through John Musca, of JLL Hotels & Hospitality. Following the sale, Redcape reaffirmed its full-year distributable earnings and distribution guidance of 9¢ per share and 8.75¢ per share respectively given in August. Chief executive Dan Brady said this reaffirmation was based on the group’s portfolio of 32 venues trading well for the year to date amid favourable industry conditions. He said the market presented “good acquisition opportunities” and the group would continue to look at “value accretive refurbishments and acquisitions”. Over the 2019 financial year, Redcape acquired six venues and sold one – the Belrose Hotel for $23 million, prior to floating, to the Bayfield Hotel Group at a 5.3 per cent premium to book value. It also bought the lease to the Mantle Group’s Pig N’ Whistle operation at Redbank Plains for $11.5 million, post the financial year, which it rebranded as the Eden Brewhouse Redbank Plains. Despite these favourable market conditions, the Redcape float has disappointed. Having floated at $1.13 a share on November 30 last year, shares were last trading at $1.08. Mr Brady said the sale of the St George Hotel was in line with its approach of actively managing the portfolio and maximising returns for securityholders. The sale of the St George will reduce the group’s gearing to 36 per cent from 38 per cent at June 30 – near the lower end of its 35-45 pre cent target range. Redcape delivered distributable earnings of $46.5 million or 8.8¢ per share, in line with pro-forma guidance for the 2019 financial year. Moelis Australia, which acquired the foundation Redcape portfolio of 25 pubs for $677 million in June 2017, is the largest shareholder (at 38.8 per cent) in the listed vehicle. It also wholly owns the group’s manager, Redcape Hotel Group Management. The divestment of the St George was the largest gaming-centric hotel sale in the country this year, according to JLL.

The Patinyotis family is selling the wedding reception venue they have owned for 40 years. Ascot House, a Victorian mansion, is on 4500 sq m of land in the heart of Ascot Vale, at 50 Fenton Street, with views across to the Moonee Valley Racecourse. The mansion was built for one of Melbourne’s earliest lord mayors, John Thomas Smith in 1860. Mr Smith, a city publican, was mayor seven times between 1851 and 1864. CBRE agents Nathan Mufale, David Minty and Leon Ma are selling the property by an international expressions of interest campaign and expect interest north of $8.5 million. It’s business as usual for the Ascot House business with a long settlement or leaseback arrangement expected to cover weddings booked into the future.

The owners of the Hotel Francis have more than doubled their money after selling the pub to Malaysian developer Aikbee Group. Aikbee Group, making its first foray into Australia with the acquisition, is understood to have paid $13.75 million for 282-287 Lonsdale Street. The three-storey art deco hotel, which has traded as Club Retro and the Niagra Hotel for several years, is on a 444 sq m site, just up the hill over Elizabeth Street. Colliers International agents David Sia, Daniel Wolman and Guy Wells brokered the deal. The vendors, Gobalakrishnan and Usha Subramaniam paid $5.75 million for the pub in 2011. It returns $542,788 a year in rent giving the deal a tight 3.9 per cent yield. But it’s obviously a development play rather than an investment – just two years remain on the lease. There haven’t been many pub deals in Melbourne this year. Last month Mr Wells and Oliver Hay sold the former Market Hotel in South Yarra for around $11 million on a 5 per cent yield. The hotel was bought in 2011 by Singapore-based hospitality group Tadcaster for $4.95 million and comprehensively gutted and revamped into the Emerson. The Emerson nightclub is operated by a Tadcaster related company, including Mark Hinkley and former footy players Leigh Colbert and Glenn Archer.

Insolvency outfit KordaMentha is sending two properties in the Steller portfolio off for mortgagee auctions next month. The sadly demolished Greyhound Hotel site is slated for auction on November 22, followed a few weeks later by the Como Private Hospital in Parkdale. Steller, the property development company steered by Nick Smedley and Simon Pitard, crashed in July, leaving more than 20 property projects on the rocks, including the redevelopment of the historic Continental Hotel in Sorrento. KordaMentha is acting for Sydney-based Atlas Advisors while McGrathNicol is acting as receiver on behalf of Asian-based financier OCP. The infamous Greyhound, a popular gay pub, was demolished more than two years ago by a previous owner. The 911 sq m corner property at 1 Brighton Road has a permit for a seven level building in a Commercial 1 zone. CBRE agent Julian White, Mark Wizel, David Minty and Chao Zhang are handling the auction. It was most recently for sale in the low $6 million range.

The O’Donnell family has offloaded Goulburn’s Empire Hotel to a private buyer for $3.55 million. The pub, which returns an annual revenue of $1.3 million, sits on a 1587sq m site with development potential. It also has 9 rooms.

The 23-room Box Hill Motel in Melbourne’s Burwood has sold to a developer for nearly $6 million. The property at 177 Station Street, leased to the hotel operator until May, sold on a yield of 2.95 per cent. The 4041sq m site, which offers residential development potential, exchanged at nearly $2 million above price expectations. Savills’ Nick Peden, Jesse Radisich and Benson Zhou in conjunction with Nelson Alexander handled the sales campaign.

The busy Balmoral Hospitality Group has put one of Brisbane’s top gaming pubs, the Acacia Ridge Hotel, up for sale with price expectations of around $35 million. The large-format hotel at 1386 Beaudesert Road – about 15 kilometres south of the Brisbane city centre – includes 45 gaming machines, a bottle shop, multiple bars, conferencing facilities and 43 hotel rooms. It last changed hands for $26.5 million in March 2017 when it was sold by Sydney publican Peter Calligeros and his business partner Stephen Farley. The buyer was Acacia Ridge Hotel Project, a company with connections to the White family private equity vehicle White & Partners. The ownership structure has changed since then, with selling agents HTL Property confirming the vendor of the freehold going concern was Sydney-based Balmoral Hospitality Group. The group, led by Joel Fisher and Andrew Denmeade, has been active in the greenfield pub market, after acquiring a site in the Flagstone housing estate in south-east Queensland and another in The Waterfront housing development at Shell Cove. Selling agents Glenn Price, Andrew Jolliffe and Dan Dragicevich from HTL Property said the Acacia Ridge Hotel consistently ranked at the top end of Queensland’s Top 10 Gaming Hotels lists. “The Acacia Ridge Hotel is an incredibly rare opportunity in a tightly held sector of the market,” said Mr Dragicevich. “Astute investors have an opportunity to purchase a substantial commercial property, and a reliable cash-flow business with strong fundamentals and clear value-accretive opportunities in key departments,” he said. Mr Price said the hotel would also appeal to property developers with mixed and alternative use opportunities available to extract from the underutilised aspects of the 18,450sq m corner block. Under its current ownership, the hotel has undergone a $2.5 million upgrade.