AVC and HPI agree six-pub deal in Queensland

The strong pub real estate market shows no sign of slowing, as Australian Venue Company (AVC) has sold six leased hotel freehold assets to Hotel Property Investments (HPI) in a deal curated by HTL Property.

HPI invested a total of $32.7m in the six properties, with a weighted average yield of 7.75 per cent and each has been leased to AVC on new 20-year contracts. HTL’s Managing Director Andrew Jolliffe told The Shout the company had worked on five of the deals, with the Capella Hotel deal being completed by Andy Nason at Power Jeffrey & Co.

The assets purchased are:

• Surf Air Hotel – $10.45m – Settled May 2021
• Commonwealth Hotel, Clermont – $3.06m1 – Contracted to settle June 2021
• Grand Hotel, Clermont – $2.78m1 – Contracted to settle June 2021
• Capella Hotel, Capella – $3.34m1 – Contracted to settle June 2021
• Commonwealth Hotel, Roma – $9.78m1 – Contracted to settle June 2021
• White Bull Tavern, Roma – $3.25m1 – Contracted to settle June 2021

HTL Property Director, Glenn Price, said: “We’re delighted to have managed the multiple sale of hotels to HPI and on behalf of our valued Queensland client base.”

“We’ve been working across borders for some months now with HPI, AVC and other national aggregators, and we look forward to announcing further deals of materiality and market interest in the next few weeks,” added HTL Property Director, Brent McCarthy.

HPI’s CEO, Don Smith commented: “The acquisition of these assets demonstrates HPI’s strong relationship with AVC and our ability to transact efficiently to the benefit of all parties.”

Jolliffe said the deal highlights the strength of the national hotel market right now.

“Sydney publicans have typically looked north to Queensland when local opportunities have been limited, but with Merivale’s latest incursion into Victoria with over $80m worth of assets already acquired, we are witnessing a shift in the lens through which the national market is now being viewed by the leading players,” he said.

“As such, HPI’s svelte acquisition of these geographically strategic properties, indexed to such a strong lessee covenant, applies further rigidity to the long term trajectory the asset class is enjoying.”