The freehold of the Edinburgh Castle Hotel in Sydney CBD, affectionately known as The Eddy, has been sold as the result of a competitive sales campaign attracting more than 85 enquiries.
Situated in a corner position on Pitt and Bathurst Street, the freehold of the pub has been acquired by Good Beer Company, while the leasehold remains with Solotel, due to expire in January 2025.
The sale was handled by JLL Hotels managing director Ben McDonald, senior vice president Kate MacDonald and JLL Capital Markets senior director James Aroney in the pub’s first market transaction in more than 20 years, attracting interest from publicans, investment funds, high net worth investors and family office across the country.
Commanding a sale result that reflects a 3.2 per cent cap rate on the passing income, McDonald says the quality of the asset and limited number of freehold hotels in the CBD contributed to a strong result.
“Pubs continue to feature prominently as part of the ‘alternative’ real estate asset class and this result highlights the ongoing appetite and appeal of the sector to a growing audience,” he explained.
According to MacDonald, not only does the hotel have significant trading opportunity, but also the potential to reestablish the freehold and leasehold interests as a freehold going concern operation for the first time in decades.
“With Sydney CBD’s first Build-to-Rent project and the recent opening of the South Pitt Street Metro Station literally adjacent to the hotel, the trading profile of the business is set to explode in the near term, and we wish the purchaser every success in the future,” she stated.
The acquisition sees the Edinburgh Castle Hotel become the fifth pub in Good Beer Company’s Sydney-based portfolio after the group divested The Commodore to Sydney publican Glenn Piper in May this year.