After selling four freeholds of pubs leased to ALH Group six weeks ago, ALE Property (ASX: LEP) has continued its divestment of the pub properties.
At the end of February, ALE sold four freeholds via auction – the Kedron Park Hotel in suburban Brisbane for $4.6m; the nearby Edinburgh Castle Hotel for $7.5m; The Pelican Waters Tavern on the Sunshine Coast for $10.8m; and The Top Pub in Morwell, Victoria for $3.06m. All four properties were sold at sub five per cent yields, and are all leased long-term to ALH.
Since then, ALE have continued on with the divestment of certain ALH-leased assets. Last week, ALE also sold the freehold to the Noosa Reef Hotel (pictured) on the Sunshine Coast via auction for $13.9m. The auction was overseen by JLL’s Jacob Swan and Sam Hatcher, and was sold to retail tycoon Greg Josephson. The hotel is leased to ALH until 2029, with a 4×10 year option. The pub asset currently returns a net income of roughly $692,515.
Now, the pub landlords are looking to sell the freehold investment of The Boundary Hotel in Bentleigh East, Melbourne, with a public tender campaign being run by JLL Hotels & Hospitality’s Will Connolly, Stuart Taylor and Tom Noonan. The Boundary Hotel sits on a 4,916 sqm corner site landholding, and is leased to ALH until 2028 with a 4×10 year option.
As part of the release of ALE’s 2021 half yearly results, the business noted that following rental determinations made in 2020, the group’s portfolio was undergoing a detailed review.
Australian Hotelier contacted ALE Property about their divestment of the aforementioned ALH-leased pub properties and the strategy behind the sales, but managing director Guy Farrands declined to comment.
Image: Facebook/Noosa Reef Hotel.