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The Bristol Arms Retro Hotel on Sussex
Street, along the CBD's western corridor is the latest
to be put up for sale, by Saint Mary's Rugby Leagues Club.
It is to be offered by a public auction
through Jones Lang LaSalle Hotels' John Musca.
Pubs have become the fastest-growing
new asset class for both large investors, such as the
ING Real Estate Entertainment Fund, and individual players.
They get earnings from gaming and capital growth from
the underlying direct property.
Mr Musca said prime freehold central
business district hotels in Sydney were becoming rare,
particularly sites in good locations with solid patronage
and goodwill.
He expected huge interest in the property.
"The Bristol is a five-level hotel
and nightclub which continues to enjoy growing income
and occupies 437 square metres on the Sussex Street CBD
site area," Mr Musca said.
"With the completion of the new
nearby Westpac headquarters twin office complex, which
will be home to an estimated 6000 employees, and the popular
King's Street Wharf only metres away, the future of this
area and this hotel looks particularly strong."
As an indication of the increased demand
for quality pubs he said he recently sold the landmark
Castle Hill Tavern for about $50million.
The price suggested it was the largest
sale of an Australian pub.
The leasehold was sold to Melbourne's
Taverner Hotel Group while the freehold was bought by
Cartella Pty Ltd, a joint venture of Melbourne hoteliers.
"The Castle Hill Tavern is one of Sydney's icon hotels,
widely accepted as one of the great suburban hospitality
and entertainment venues," Mr Musca said.
"The sale was keenly contested by
a number of other institutional clients and there was
obviously an inherent value in the 16,000sqm of land as
well as the revenue of the tavern."
Also in the centre of Sydney, the Pubboy
group sold its management of the Criterion in Park Street
to concentrate on freehold properties, while the owners
of the Home Bar and nightclub at Cockle Bay and the White
Horse in Surry Hills are also looking to exit the market
and undertake new ventures. Metro Commercial is selling
the two assets and say demand is high from the listed
trusts and smaller buyers already exposed to the sector.
In two other off-market hotel transactions
this week, Mr Musca negotiated the exchange of the Croydon
Park Hotel for an estimated $15 million, while the William
Hotel, Kings Cross, also changed hands.
Sydney remains the focus of pub sales
because it is seen as the prime investment destination,
with revenue potential and cash flow opportunities.
The Croydon Park Hotel, last sold in
1996, includes a public bar, bottle shop and gaming room
and was bought by Sydney hoteliers the Lewis Hotel Group.
The William Hotel was reportedly sold to well-known publicans
the Laundy Hotel Group.
"Although very different businesses,
both hotels offer the new owner-operators demonstrable
trading upside and occupy valuable commercial property
land holdings which are set to grow with the transformation
of the immediate areas," Mr Musca said.
Meanwhile the Barana Group and Toga Hospitality
have bought the Concorde Hotel on the Nerang River waterfront
of Queensland's Gold Coast for $27.5million in a deal
brokered by Mike Batchelor of Jones Lang La Salle Hotels.
Greg Shand, of the Barana Group said
Vibe Hotel Surfers Paradise will undergo a multi-million
dollar refurbishment to ensure it meets the expectations
of the emerging market of savvy, modern travellers.
The Vibe Hotels brand, less than two
years old, now boasts six hotels across Sydney, Melbourne
and now the Gold Coast.
Vibe hotels are managed by Toga Hospitality,
well known for their Medina Apartment Hotels.
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