ALE has sold another non-core pub property, the Boundary Hotel in Melbourne’s Bentleigh East, to a private investor for $33million.
ALE Managing Director Guy Farrands said: “These pubs were identified as non-core holdings following the receipt of the rental determinations late last year. They are all leased to ALH, Australia’s largest hotel operator, on long-term triple-net leases with annual CPI reviews and renewal options.
“It has been some time since ALE has sold a property subject to this lease and we are pleased with how the market has received these assets.”
Earlier this year the pub group sold the freeholds to three Queensland and one Victorian pub.
The Boundary Hotel sale was negotiated by JLL’s Stuart Taylor, MingXuan Li, Tom Noonan and Will Connolly. The deal reflects an initial yield of 4.23 per cent and a land rate of $6,712/sqm.
Stuart Taylor, Senior Director of Retail Investments at JLL said: “The asset was offered to market by public Tender, with bids submitted on the eve of Melbourne’s latest lockdown. The extremely strong result achieved highlights investors continued confidence in the commercial real estate sector.
“The asset offered investors a secure income stream, underpinned by the largest integrated liquor and hospitality business in the country, whilst supported by a highly strategic landholding.
“Investor sentiment for long lease assets has never been stronger, fueled by a positive interest rate environment and flight to quality.”
JLL’s Head of Asian Markets, MingXuan Li, added: “The asset attracted significant interest from offshore capital, driven by the land size and long-term redevelopment potential.
“Asian buyers are looking at this type of asset as long-term land banking opportunities with strong holding income.”
Taylor also said that the sale price reflected more than a 30 per cent premium to most recent book valuation of the property, which highlights the weight of demand for well leased property in the current market.