Incoming buyer of Manly’s Hotel Steyne reveals Iris Capital strategy to Australian Hotelier.
After John Singleton and his consortium of co-owners sold Manly’s Hotel Steyne to Iris Capital for around $62.5m in a deal brokered by HTL Property, Australian Hotelier caught up with Iris Capital’s CEO, Sam Arnaout.
“The acquisition of the [Hotel] Steyne obviously brought us a lot of joy,” says Arnaout, clearly delighted with the acquisition. “We’re very happy to buy the asset. We were delighted when we were told we were the successors.”
Explaining the group’s rationale for paying what is believed to be a record price for an Australian hotel, Arnaout told Australian Hotelier,
“The acquisition of the [Hotel] Steyne is obviously a strategic one for the group. It now crowns the portfolio and gives us economies of scale across the group. Obviously from this, it gives us a good opportunity to leverage out from the wider portfolio, be it suppliers, giving us good benefits across the wider group.”
Alluding to that scale, Arnaout claims: “The reports back from the breweries [reveal] it’s one of the largest bulk-beer venues in Australia.”
Confirming the purchase was clearly strategic, Arnaout admits to the prestige it also now affords the group.
“The asset is an icon in its own right, there’s no doubt about it,” says Arnaout. “We feel the asset crowns our portfolio, it’s the crown jewel for our portfolio and we definitely see the asset delivering a certain level of prestige, as you put it, certainly.”
Arnaout admits to not yet having met the Hotel Steyne’s existing GM and team, but says “we’ll get in there early and try and get in and meet the team, as and when the co-owners allow us access.”
Arnaout confirms the group’s immediate plans are to maintain the status quo:
“We don’t intend to disrupt the business, we intend to take the reins and maintain the status quo for the foreseeable future. For more than three or six months, probably the next 12 months.”
Instead, the intention is, for the next 12 months, Arnaout says:
“We look towards enacting that DA [for a] 48-room hotel. Generally a bit of TLC, bringing the joint back to its former glories is pretty much where our focus will be.”
Addressing reported concerns from the local community when the Hotel Steyne was put to the market, which feared the venue’s look and feel could be compromised by a new buyer, Arnaout says:
“I didn’t hear any of those concerns. I think the idea of the pub – using yours words – being ‘trashed’ – the reality is, rest assured, look at our wider portfolio, they’re all strong, local assets within their community.
“Our ethos is to work with the local community to ensure we position the asset for the future. We would not look to spoil what’s good about the Hotel Steyne, we would look to embrace and improve upon the attributes, its heritage nature, everything that’s beautiful about it, that the locals love about it, and take comfort that we will do everything that’s best for the asset and all the stakeholders within the community.
“There’s no doubt that we have experience of doing that. If we take the Hunters Hill Hotel, a community asset where we worked hard to ensure community expectations were met and worked diligently and hard over 12 long years to ensure that asset was well placed within the community.”
Arnaout is clearly not discounting the idea of expanding the group either.
“We’re well positioned to take advantage of further acquisitions within the group,” he says. “This asset is certainly going to be given the attention it deserves, there’s no doubt about it. But our group is well positioned for scalability and we will be looking at further opportunities when they present themselves and that meet the group’s criteria.”