The Area Hotel in Griffith has been sold by HTL Property, in what is being described as a vote of confidence in the NSW Regional pub market, and The Riverina in particular.
The off-market transaction, which was brokered by HTL’s Xavier Plunkett in conjunction with Nick Tinning, sees vendor Jim Knox enjoy a “handsome value uplift” in the property he purchased for around $8m in 2019.
The traditional-style Hotel featured a public bar, TAB, commercial kitchen, beer garden, gaming room operating 30 highly valuable poker machines, 15 pub-style accommodation rooms, a two-bedroom manager’s residence, and a 3am liquor licence.
“Griffith was our first foray into the hotel industry having acquired two other hotels, the Griffith Hotel and the Gemini Hotel, back in 2014; and later the Area Hotel in 2019” Knox said.
“The Griffith region has been very good to us, in our hotels business especially, but also our agriculture and engineering-related enterprises. However, it poses geographical challenges for our key personnel and in the medium term, we are looking to consolidate our holdings closer to our head office in the New England Region.”
After he sold The Area Hotel, Knox retains the upmarket Gem Hotel, which boasts 65, 4-star hotel rooms, an OLGR top 250 gaming room and a steakhouse that has featured in the world’s top 100 best.
HTL Property described the purchaser as “a highly regarded private investor with local connections”.
Plunkett said: “Griffith enjoys some of the most desirable hotel fundamentals of any regional centre; full employment, well above average incomes, enormous itinerant worker base, a favourable ratio of one pub per 7000 residents; and government regulatory restrictions on any further pub competition. The incoming purchaser will no doubt enjoy a long-term sustainable competitive advantage in the city.
“As an experienced brokerage firm, assisting valuable and long-term clients realise such favourable financial outcomes, is the most rewarding part of the profession.
“Having sold Knox both into and out of the asset so successfully, highlights the value of deep client-broker relationships.”
The sale continues HTL’s run of high-value pub sales in the regional, having recently brokered Jerrabomberra Hotel Jerrabomberra ($23.5m), Thomas Blamey Tavern, Lake Albert ($25m), Victoria Hotel, Wagga Wagga ($29m), and Springdale Heights Tavern, Albury ($22m).
“The record sale of the Area Hotel reinforces HTL’s considered view that sophisticated investors will prioritize the asset class when comparing it to other commercial property holdings; particularly where the business model and associated approvals required, provides for a scenario whereby barriers to entry for challenges to market share remain so high,” said HTL Property Managing Director, Andrew Jolliffe.