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.

Vanessa Cavasinni

Vanessa Cavasinni is the managing editor of Australian Hotelier and Club Management, trade publications for the pub and club sectors respectively. Vanessa has been at the helm of Australian Hotelier since...

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