By Clyde Mooney
The licensed premise market is presently bulging with opportunities for cashed-up investment groups looking to bag the right bargain at the right price, with John Singleton recently doing exactly that.
Just west of Sydney’s CBD, the cosmopolitan suburb of Glebe has a number of old venues that are struggling to maintain a good return in an age of flashy refurbishments.
The Toxteth Hotel on Glebe Point Road, reputedly the oldest pub in Glebe, has been ‘family run’ by the Murphy family through Murphy Hotel Management in recent years, but has struggled to achieve yields greater than 10 percent.
To the rescue has come the Lazard Carnegie Wylie Pub Fund, an alliance between Patrick Coughlan and business partner Rodney Kelly with Lazard’s Mark Carnegie and preeminent ad-man John Singleton.
It is understood that the sale price was just under $10 million.
With the stated aim of turning distressed pubs around through an increased focus on their core business – food and beverages – the group will hope to exercise their speciality for profitable short-term fixes.
The fund has already purchased a number of big-name venues over the past year, including Manly’s iconic Steyne, Paddington’s Bellevue Hotel, the Peakhurst Inn and Kinsellas in Darlinghurst.
As with these hotels, Sydney hotelier Patrick Coughlan’s Riversdale Group will operate the Toxteth’s day-to-day operation.
With SIA for another six poker machines (to total 27) and a DA to convert the first floor to new function rooms and bar, the Toxteth has the potential to turn around its lackluster profitability with the right spending.
“The hotel is well placed to benefit from the Mirvac $1bn 1,200 lot Harold Park residential and retail re-development only metres away,” John Musca, agent Jones Lang LaSalle Hotels.
He suggested that the Toxteth Hotel demonstrated the sound traditional hotel investment attributes of ‘significant underlying property value, a well balanced mix of trade, extensive footprint with outdoor areas, and quantifiable trade uplift under more aggressive operation’.