By Andrew Starke
The privately owned Aussie Leisure Group (ALG) has put five of its hotels in NSW and Queensland on the market in the latest addition to what has been a spate of recent sales.
The iconic Magnum’s hotel and nightclub in Airlie Beach and the Commercial Tavern at Ayr near Townsville will headline the auction, which is to be staged at the Sydney Auction Centre on Wednesday April 14.
The Melbourne-based ALG will also look to sell the Woolloomooloo Bay Hotel in Sydney, the Cambridge Tavern at Fairfield in Sydney and the Iron Horse Hotel at Cardiff in Newcastle.
ALG purchased the Cambridge Tavern, traditionally one of the top gaming hotels in NSW, for approximately $45 million in 2008.
CBRE Hotels Director Joel Fisher, an agent for the sale, said the pub group was moving to capitalise on the strong private investor demand for well positioned commercial properties with long term secure leases in place and strong investment fundamentals.
All five hotels offer long term leases, with long initial terms of as much as 23 years to the the Australian Leisure and Hospitality Group (ALH), which is 75 percent owned by Woolworths.
“The most attractive feature of the ALG hotels are the fixed 3.25 percent rental increases each year and the un-tapped development potential resting with the landlord, in particular at the waterfront Woolloomooloo Bay Hotel,” Fisher said.
“We expect strong interest from investors seeking a long term, secure cash flow investment with guaranteed annual growth and future development potential.”
Magnum’s is expected to attract particularly strong investor interest as the hotel is renowned for its 530sqm deck bar and includes a gaming room, pool room, nightclub and function rooms.
In NSW, the premier offering is the recently renovated Woolloomooloo Bay Hotel on the corner of Bourke Street and Cowper Wharf Roadway, overlooking Sydney Harbour and adjacent to the Woolloomooloo Finger Wharf.
The hotel includes a bistro, gaming lounge, beer garden and function rooms.
The hotels will be offered for sale individually at the Sydney Auction Centre, with interstate bidding to be facilitated in CBRE’s boardrooms in Brisbane, Melbourne, Adleaide and Perth.