Paddington corner pub the Captain Cook Hotel has been sold as demand for Sydney pubs continues to defy the lockdown.
A private syndicate associated with the current leaseholders acquired the pub’s freehold interest for $10.5 million after a “spirited bidding war”, according to JLL Hotels & Hospitality Group which managed the sale.
The Captain Cook’s operators took over the business in January last year. Since then, they have re-branded the food and beverage operation to The Captain as part of a refresh of the dining space.
When the freehold went up for sale, the new owners sought to “securitise their business interest with the restapling of the valuable underlying property interest”, JLL said.
The company says that buyer demand has remained strong in Sydney in anticipation of a post-Covid trade bounce.
“Despite unfortunate current hotel ownership challenges in Sydney, the transaction momentum is expected to continue across the asset class as this time owners have the benefit of first-hand experience of what the post-COVID closure trade bounce looks like,” JLL managing director John Musca said.
“The compelling investment metrics, limited asset supply and core investment drivers will be exemplified once we enter the inevitable post-Covid operating trajectory.”
The Captain Cook hotel is housed in a four-level building with a rooftop offering 360-degree views of Sydney and includes 15 PMEs, 18 accommodation rooms, entertainment room and substantial 2-bedroom manager’s apartment. The hotel is walking distance from the soon-to-be reopened Sydney Football Stadium, SCG and Entertainment Quarter, and has light rail access to Central Station.
Musca told Australian Hotelier that a new commercial office building next to the stadium represented a new catchment for the pub.
“When the world normalises, the Captain Cook will also benefit from a high level of occupation on weekends when people come into the city for sporting events and from international students and backpackers,” he said.
Newcastle’s Grand Hotel sold
The sale comes at a time of insatiable appetite for hotels across the country, with JLL also this week announcing the sale of the Grand Hotel in Newcastle for an undisclosed amount.
The hotel’s long-term owner Mike Angus said he had received numerous unsolicited approaches over the preceding 12 months before engaging the services of JLL’s Ben McDonald and Kate MacDonald, and Moore & Moore Real Estate’s Deane Moore.
“Having owned and operated the hotel for over 30 years, I felt the time was right for me personally, and I couldn’t be happier with the result and level of service Kate, Ben and Deane delivered in what was a fairly emotional decision.”
The hotel is located close to the beach and has 17 recently renovated and ensuited accommodation rooms, six GMEs, a 3am trading approval, and distinct food and beverage trading options.
JLL’s Kate MacDonald said: “Being situated in the burgeoning east end of Newcastle and approximately 200m to the beach, the Grand Hotel offers incredible scope to capitalise on the significant transformation of the immediate area whilst leveraging the broader appeal and growing market demand for Newcastle itself.”
Moore said that Newcastle and the Hunter region continues to show an impressive growth trajectory with significant capital investment from public, private and government sources.
“This fundamentally will continue to drive the appeal of the area and we anticipate ongoing interest in the location from a varied investor set.”
The EOI campaign attracted local and interstate hoteliers, passive commercial property investors, and ‘value-add’ opportunity funds seeking exposure to the asset class, JLL said.
Heightened demand continues to outstrip supply throughout the NSW pub market, according to JLL, with the recent listing of the demerged Endeavour Group and build up to the future ASX listing for Australian Venue Co adding “corporate depth to an already populous private investment landscape in the active hotel real estate asset class”.