The Royal Exchange Hotel, which is operated by ASX-listed Endeavour Group, has gone under the hammer at $14.05m and at a yield of four per cent.
The on-market nationwide auction campaign for the Toowong-based large-format venue took place online, with representatives from multiple states participating. Bidding commenced at just under $10m for the venue which had a $12.5m reserve.
The Royal Exchange Hotel is anchored by tenant Endeavour Group, the nation’s largest hotelier, and the seller was ALE Property Group, which is also ASX-listed. The hotel has a 25-year triple net lease with four additional 10-year options, taking the tenancy to 2068.
“The sale at $14.05m and at a 4.01 per cent yield is reflective of the positive asset class sentiment we are tracking nationally,” said Glenn Price, a director of HTL Property which managed the sale along with Burgess Rawson.
“In conjunction with our colleagues at Burgess Rawson, and following the very positive auction sale, we can report significant sector interest, particularly in respect of blue-chip covenants such as that represented by Endeavour Group.”
HTL Property said the sale follows the divestment of a number of other properties this year, all with the Endeavour Group as long-term tenants, although this venue was the first to reach a 4 per cent exit yield.
The venue has a 2,453 sqm landholding with multiple bars, a beer garden, a gaming lounge with 40 gaming machines, 27 parking spaces and net income of $562,715 per annum.
The Royal Exchange Hotel is located near the Brisbane CBD, Southbank precinct, and has future development potential, according to HTL Property.