The Cat and Fiddle Hotel has partnered with property tech platform, Bricklet, to offer shares in its property and building.

There are 1600 shares available for purchase from a total of 2000. Each share costs $10,300  (inclusive of stamp duty) and offers a return of three per cent in net rental yield per annum, according to Bricklet.

The shares will be sold through IPAN Property’s iPAN-X marketplace, and after sale, will be able to be traded freely. These shares are available for purchase now, via market order. Twenty per cent of the shares will be retained by existing owner Richard Wynne.

Once purchased, the possession of the shares will be recorded on a blockchain registry, which will provide a permanent record of ownership, and will greatly speed up the settlement process, Bricklet says.

Australian Hotelier spoke to Bricklet CEO, Darren Younger, to get further detail on how this unusual freehold sale came about.

“First of all, the Cat and Fiddle is a good pub in a good location in Sydney, and it was just through network that someone knew the owner Richard, and I was introduced and we had chat about what we do,” Younger said.

“We had a lot of interest from people wanting to buy into different assets and a pub was one of them, so mentioned the idea and he thought was a good idea.”

This was the first time that Bricklet has worked with a pub, though there are plans to partner with further venues in the works. Certain considerations had to be made for this initial deal, as the CEO illustrates.

“Just the way it’s structured – having an entity that owns the property, and then having an operating business. So you know that with a commercial property like a retail outlet, it’s a very clear distinction, but pubs often have a kind of blurry line here,” Younger outlined.

“So making sure we understand that there’s effectively a commercial lease between the owner and the operator.”

The shares in the Cat and Fiddle are listed as providing a three per cent yield, or $300 per annum, per lot. Younger provided greater detail here.

“That’s a calculation of the rental dollars versus the value [the shares] are currently selling at – but that’s not set by Bricklet at all, it’s set by the vendor,” Young explained.

It is important to note that it is only the freehold that is for sale. Nevertheless, this does raise the question of how decisions about the property will be made once the shares have been sold, with Younger explaining that IPAN’s system accounts for this.

“There’s a voting mechanism on the marketplace for people to be able to vote on decisions,” Younger said.

For Younger, there are manifold benefits for the existing owner of a share sale. It means that rather than dealing with one overarching shareholder or land owner, the existing owner can raise capital from a wider array of investors.

However, Younger states that the most important aspect is the inclusion of the local community.

“It opens up the opportunity for more people to own the asset, and to own a piece of that pub, which might even create some loyalty – people will come in and have a beer because they own a piece of it,” Younger explains.

And the current owner and operator, Wynne, agrees.

“I welcome this investment as it frees up capital to explore other acquisitions under a similar model,” Wynne told Australian Hotelier.

“We’ve had a lot of mums and dads, local residents and customers enquire, and they see it as a great investment and a bit of fun to own a piece of a pub.”

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