NEWS PROPERTY

The owners of the European Bier Cafe in the CBD are selling up and expecting a big price for their prime eastern precinct location and Australian Venue Co lease. Teska Carson agents Larry Takis and Matthew Feld are handling the sales campaign of the 120 Exhibition Street freehold on the corner of Little Collins Street. The 820 sq m double-storey building is on a 293 sq m lot and expected to sell for circa $22 million. The move to sell comes as private equity giant KKR, AVC’s majority owner, reportedly started the ball rolling on plans to float its $1 billion pub and dining business. AVC has a five-year lease on the two-storey pub on the corner of Little Collins Street for five years starting in 2017 with two five-year options. It pays $526,382 a year in rent. The giant 160-site hospitality business has also recently picked up the leasehold on Bimbos in Brunswick Street Fitzroy, the former inner-city music venue, The Punters Club. Chris Morris’ Colonial Leisure Group was the vendor in that deal brokered by JLL agent Will Connolly. AVC has also taken on the lease of another former music venue, the Sarah Sands Hotel which is poised to open in May. A year ago, the prospect of a long shutdown caused by COVID-19 killed off AVC’s $100 million deal to buy the Esplanade Hotel in St Kilda and seven other gastropubs.

The Castlereagh Hotel and the Federal Hotel in Wellington have both been sold, setting a new record sale price for pubs in regional NSW.

Lilyponds Holiday Park in Mapleton has lodged a development application to build a further 17 serviced sites. The caravan park in the centre of Mapleton village has been operating since the early 1980s. The property has powered sites, cabins and caravans with internal sealed access and circulation roadways. There are 45 sites on the 2.044ha block with 30 on-site vans, 11 on-site cabins and four mobile homes. The expansion to the tourist park could rake in an extra half a million dollars for the region, according to documents lodged with Sunshine Coast Council.

Australia’s largest pub operator snapped up a waterfront Sunshine Coast hotel after it went under the hammer $3 million over reserve. About a dozen parties were locked in “strong and aggressive” bidding before Pelican Waters Tavern eventually sold for $10.8 million to Woolworths-backed ALH Group. Burgess Rawson Queensland sales and leasing director Glenn Conridge said the hotel’s size, waterfront location and attachment to a shopping centre made it an attractive buy. He said the four-week sales campaign for the hotel previously owned by ASX-listed ALE Property Group attracted almost 400 inquiries. Interest came from throughout Australia as well as Hong Kong, America and Singapore.

Plans have been lodged with Sunshine Coast Council for a new wedding and events facility at 418 Maleny-Kenilworth Rd, Witta. The proposal includes a new function centre and mansion on the 13.7ha property. The mansion is proposed to have a two-storey building at the centre, with single-level accommodation wings on each side. The wings would be made up of three rooms each, all with bed, ensuite, robe and court area.

Australia Zoo has been working hard to create Cigamp Croc Hunter an $8 million wildlife camping experience. The camp site is expected to lure more than 39,000 visitors to the Sunshine Coast each year. The 108-site campground will include tent accommodation to caravan and RV powered sites to glamping-style tents and eco cabins. It will also include a cafe, reception, entertainment and pool area, caretaker quarters and workshop, amenities blocks, covered cooking areas school camp facilities and a mountain bike course. The site was originally slated to be completed last year.

Financial Review Rich Lister Arthur Laundy has picked up his second pub in regional NSW this year after partnering with publican Fraser Short to acquire the Illawong Hotel at Evans Head, south of Byron Bay, for about $15 million. The acquisition follows Laundy Hotels buying the Lennox Hotel near Byron Bay for more than $40 million in February. High-net-worth capital is pouring into pub real estate, including many venues in regional locations, amid a recovery in trading performance, an easing in restrictions and record low interest rates. The acquisition of the art deco Illawong Hotel was via a syndicate comprising Laundy Hotels, Mr Short’s Sydney Collective, Mr Laundy’s daughter Justine Tindall and her husband, Nick Tindall. Nick Butler and Steve Pursell from Pub Brokers & Advisory sold the hotel as a freehold going concern. The property’s freehold was offered by Janice and Kenneth Harper and the business interests by operator Daniel Simpson. The Illawong Hotel is the only pub in the coastal town of Evans Head, which lies an hour south of Byron Bay and 30 minutes from Ballina Airport. The building, set on a 2200sq m site, includes 15 gaming machines, 18 accommodation rooms and an attached retail store. “We think this is just a sensational coastal hotel in a town that’s already on a great trajectory,” Mr Tindall said. “Justine and I are excited to be partnering with [Sydney Collective], as well as her broader family.” Mr Butler said the Illawong Hotel’s strong hospitality business attracted the interests of the Laundy family and Fraser Short. Back in Sydney, the Gallagher family has sold its second Sydney hotel this month after divesting the Union Hotel in North Sydney for $20 million. The Union Hotel was sold to Sydney operators GoodBeer Company, led by John Azar. Good Beers’ portfolio currently also includes the Commodore Hotel, McMahons Point and the KB Hotel, Surry Hills. JLL Hotels & Hospitality Group managing director John Musca and senior vice-president Ben McDonald negotiated the off-market sale. Last week, ex-Wallaby Mr Young paid about $40 million to buy the Royal Hotel at Ryde, in north-west Sydney, from hotelier Patrick Gallagher. The Union occupies a 784sq m site with two floors offering more than 1200sq m of trading footprint. The hotel includes 21 gaming machines, three bars, a restaurant and function rooms. “We are very excited about bringing the Union into the group and to servicing the North Sydney community, creating a special hospitality experience for locals,” Mr Azar said. Mr Musca said post COVID-19 demand was “driving an extraordinary level of transactional activity, in what remains a highly regulated and protected asset class”.

High net worth investors splashed out $109 million in a couple of hours on pubs, childcare centres and service stations at a sold-out commercial property auction in Melbourne that highlights the depth of appetite for long-leased assets amid record low interest rates. Reserves were smashed by 11 per cent on average as 26 properties offered for sale by agents Burgess Rawson sold at a packed auction held at Melbourne’s Crown Casino on Wednesday morning. “The appeal of essential service tenants, long leases, reliable rent and strong land values is proving irresistible,” Burgess Rawson director Jamie Perlinger said. The agency estimated that demand for real estate was six times greater than what was on offer, based on the $633 million buying potential of registered bidders. A big winner on the day was ASXlisted pub landlord ALE Property Group, which sold all four of the venues it offered to investors at a more than 20 per cent premium to their book value. All were sold with leases until 2028 to the country’s largest pub operator, ALH, which is 85.4 per cent owned by Woolworths’ $13 billion IPO-hopeful, Endeavour Drinks. They included the Pelican Waters Tavern in Caloundra on the Sunshine Coast, which sold for $10.8 million on a yield of 4.15 per cent, more than $3 million above its $7.6 million book value. All four pubs sold on yields at or below 5 per cent. Another top result was a Carl’s Jr fast food outlet in Thomastown, Melbourne offering a 10-year lease, which sold for $6.4 million on a 4.6 per cent yield.