By Andrew Starke
The proposed sale of 20 pubs owned by the Redcape Property Fund (RPF) and run by National Leisure & Gaming (NLG) to the Laundy Hotel Group will give the hotel sector ‘undeniable momentum’.
This is the view of former NLG CEO and current managing director of Ray White Hotels Australia Andrew Jolliffe, who believes any such deal would revitalise the pub market.
"The proposed Laundy, NLG and RPF transaction represents a material watershed juncture for the national hotel space,” he told TheShout.
“The proposal, involving several hundred million dollars, seeks to repatriate the freehold and leasehold assets of a number of NSW and Qld hotels.
“This process, subject to Board, Shareholder and other approvals, has the potential to reshape the face of the transaction participants; and the broader hotel industry.”
Under the terms of an agreement announced last week, a company related to the Laundy family has started a one-month exclusive bargaining period with Redcape and National Leisure and Gaming.
It is believed that the eventual deal will be worth more than $300 million.
In a statement to the Australian Stock Exchange, NLG said a ‘related company’ of the Laundy Hotel Group had until April 28 to negotiate the acquisition of the 20 pubs leased by NLG from RPF.
Should this transaction occur, it is intended that NLG continue as the leasehold owner of its remaining 15 pubs.
Redcape would continue to hold about 50 pubs, most leased to Wesfarmers / Coles under long-term leases.
While Jolliffe believes any deal will take several months to conclude, the prognosis for the industry is positive.
“It comes at a time in the investment cycle where the interest in hotels has gained undeniable momentum, and this proposed transaction serves to validate what a number of astute industry stakeholders already know,” he said.