Redcape has bought three large-format pubs in south-east Queensland for a total value of $66m.
Redcape announced that it has acquired the freehold interests of three pubs in SEQ for a total value of $66m: the Commercial Hotel, Redbank; Lucky Tree Tavern, Durack; and The Willow Hotel, Moorooka. Redcape suggested that the acquisitions reflected its progress in executing its strategy for renewing and diversifying its portfolio to drive earnings and distribution growth and unlock additional value through capital investment.
“These acquisitions are right in line with our strategy to enhance our returns for investors by targeting high-potential venues in growth markets through actively managing the portfolio. This leverages the Fund’s ability to sell select assets as accretive opportunities are identified,” stated Redcape managing director Chris Unger.
“Pubs have been trading really well, which has continued in the lead-up to Christmas. This isn’t a surprise to us; this sector has proven its resilience time and time again. Communities continue to embrace the affordable and social pub experience, and the strong trading environment demonstrates this and the strength of the asset class.”
The Willow Hotel and Lucky Tree Tavern were sold by publicans Peter Braithwaite and Brendan Lawless, while the Commercial Hotel in Brisbane’s Redbank Plains was sold by industry veterans Patrick Ryan and Peter Filipovic. HTL Property handled the exclusive off-market sales of the Willow Hotel and Lucky Tree Tavern, while the Commercial Hotel campaign was run in in conjunction with JLL.
“The sale of the Lucky Tree Tavern, The Willow Hotel and Commercial Tavern represents a watershed moment for the local market, but one which is well deserved given the scarcity of supply and the historically undervalued nature of high-quality assets within the south east Queensland region,” stated HTL Property’s Dan Dragicevich.
HTL’s Glenn Price said the Queensland market has become even more desirable for operators and investors in the last six months.
“The market has seen a shift in the thinking regarding successful buyers in FY25 across Queensland, with purchasers prepared to be more active regarding their search for assets so as to augment their respective portfolios; going beyond the traditional yield thresholds that have been determined over recent years.
“With gaming machine authority values across Queensland at an all-time high, and both on- and off-premise trade continuing to grow year on year, the Queensland hotel sector has become even more desirable to key industry players across the nation; with large corporate groups, institutional investors and private syndicates driving the market.”
Strategic investments
The Redcape portfolio continues to deliver strong operating results, giving the company he confidence to increase the March 2025 quarter distribution target to 2.50 cents per unit (an increase of 11 percent), representing 10.0 cents per unit on an annualised basis.
Redcape has been re-aligning its portfolio in the last 18 months, divesting and acquiring multiple hotels. The realignment has included an asset swap with Gallagher Hotels, and the sale of multiple pubs in suburban Sydney.
With a strong pipeline of future projects, Redcape is looking to drive sustained growth and create long-term value for its investors through its capex program.
“As we head into the busy summer season, we’re optimistic about what lies ahead. Pubs aren’t just great assets – they’re enduring cornerstones of communities, where people come together for connection and entertainment. With positive trading conditions and a strong pipeline of opportunities, we’re excited about the near-term outlook and confident in our ability to deliver sustained long-term growth,” stated Unger.
Redcape is currently looking at further acquisitions, with Unger saying it was in advanced proceedings on multiple assets.
“With additional venues under advanced due diligence, we’re on track to deliver on our strategy to increase distribution yield for investors and continue to build on our total return track record with sustained long-term growth.”
Redcape will assume operational control of all three Queensland assets prior to Christmas.
