By Vanessa Cavasinni, editor Australian Hotelier
Sam Arnaout’s Iris Capital has sold the freehold of the Clovelly Hotel in Sydney’s eastern suburbs.
The 1708 sqm property has sold for $34 million, in a deal negotiated by John Musca of JLL Hotels & Hospitality and Miron Solomons of Colliers International. The identity of the buyer has yet to be revealed, except for the fact that they are a local investor. The sale prices represents an approximate 5 per cent yield.
The four-level pub includes an outdoor beer garden, 14 hotel rooms, basement carpark and 15 gaming machines. It also offers extensive ocean views.
Solotel secured a 20-year triple net lease of Clovelly Hotel in December 2016 for more than $30 million, with a straight 10-year first term and fixed annual rental growth of 3 per cent per annum.
The freehold sale includes lessor ownership of the hotel licence and fifteen gaming machine entitlement. Musca suggested that there was plenty of interest in the freehold sale.
“As expected the opportunity was keenly contested, with wide-ranging local, interstate and offshore interest, not surprising given the asset profile and the fact that residential property in the area is selling for nearly $28,000 pm2 today”.
Solomons added that large-format pub assets such as ‘The Cloey’ are rarely on the market.
“The underlying intrinsic value of this property is exceptional and to find a beachfront investment of this size in Sydney especially with a tenant of this calibre is just so unique.”
It’s been a busy few months for Iris Capital in regards to pub transactions, swapping the Hunters Hill Hotel for the Tiger Bar Hotel in a $65 million deal with Gallagher Hotels, and selling the Crown Hotel site in Parramatta to a developer for $50 million.