A recent report from CBRE has examined the country’s fragmented but resilient pub landscape, the way in which population shifts are driving interest in regional pubs, and how the recent rebound in transaction activity is reshaping the Australian pub sector.
The report titled Raising the Bar – Investment and Innovation in Australian Pubs, focuses on the sector’s challenges, risks and future state.
CBRE research analyst Katya Ezhova said the results of the report revealed a positive outlook for the value of venues.
“As interest rates stabilise and cap rates compress, investor demand – particularly from institutional and syndicate-backed buyers – is poised to support modest uplifts in asset values, especially for venues with strong gaming entitlements and redevelopment potential.”
Kire Georgievski, CBRE senior director, hotel valuations, agreed adding that increased appetite from traditional bank lenders – particularly for assets with strong gaming entitlements and consistent cash flows – was adding further momentum to the sector.
“This resurgence in credit availability is enabling more competitive bidding, especially among private investors and syndicates, and is helping to underpin valuations,” said Georgievski.
Key insights
Insights from the report include:
Yield compression and renewed confidence
Investor sentiment has strengthened through 2025, particularly in New South Wales and south-east Queensland, following three rate cuts and increased performance in the gaming sector. Freehold going-concern yields have compressed to around 6.75 per cent in Sydney Metro and 7.5–9.5 per cent in south-east Queensland. This is underpinned by quality and strategic investment deals occurring, signalling a maturing investment landscape.
Policy-led liquidity in Queensland
Queensland’s operating authority market for gaming is structured across three geographic sectors with transfers conducted via blind tender and overseen by the Office of Liquor and Gaming Regulation (OLGR).
In 2022 a trail began to simplify transfer to operating authorities by publishing the minimum acceptable price and reducing the surrender tax from 33 per cent to 15 per cent. The reform transformed a previously supply constrained gaming system, improving liquidity, trading volume and price transparency.
After a peak in early 2025, values have corrected from $661,000 to $565,000 per authority, creating a more balanced and sustainable market.
Resilient asset class
The pub sector continues to demonstrate strong income stability and liquidity despite higher operating costs, underpinned by diversified revenue streams, supported by daily cash-flow fundamentals. This is evident in south-east Queensland where investor interest is particularly strong in freehold going concern pubs with diversified income from accommodation, bottle shops, bistros and event spaces.
Institutional capital and consolidation
Large-scale private groups (typically family run) and funds continue to dominate upper-tier transactions, with heightened interest in gaming-intensive freeholds. Leasehold activity remains elevated as operators seek lower-capex entry points and operational upside.
Opportunities across states
CBRE’s report shows that New South Wales leads national transactional activity, Queensland remains the most dynamic regulatory environment, and Victoria offers selective value in non-gaming and regional lifestyle assets.
Across all three states, urban shifts have fuelled the regional hospitality boom as pubs are considered key social and economic hubs, reinforcing the strength of the regional hospitality sector. This is supported by a 41 per cent increase in regional spending compared to pre-pandemic levels.
Other states remain yield-driven, low-liquidity markets anchored by owner-operators.
Spending trends
Hospitality spending remains resilient, up 72 per cent over the past four years, as Australians continue to prioritise affordable social and dining experiences. Despite economic strain from rising inflation, interest rate sensitivity and worsening housing affordability, Gen Z and millennials have shifted toward smaller, more frequent indulgences rather than large discretionary purchases.
Events have also become a major demand driver in pubs with one-off, high impact events generally generating spikes in patronage and spend, with longer tournaments and festivals showing consistency in trading performance.
The Pub Grub Indices
The report also highlights the evolving role of food and beverage offerings in successful pub operation, via ‘The Pub Grub Indices’ – a collection of data from 105 venues in New South Wales, Victoria and Queensland, focusing on old-school pub staples that have made a gourmet comeback.
The Pub Grub Indices shows that beyond pricing, evolving consumer tastes and innovation from chefs using new toppings, cooking techniques and flavour fusions, are turning classic meals into elevated experiences and driving higher pricing.
The indices saw Victoria emerge as the most premium dining market, followed by New South Wales, with Queensland remaining the most affordable.
Ezhova said the highest-priced venues were typically those that had undergone significant refurbishments in recent times, suggesting a correlation between capital investment and menu pricing as consumers place a premium on quality dining experiences within pubs.
Looking ahead
The report’s insights also reflected on the sector’s adaptability noting that the traditional pub model is evolving into multi-purpose lifestyle venues that combine food-first strategies, premium beverages, digital ordering, loyalty programs, live entertainment, and boutique accommodation.
Design-led refurbishments and tech-enabled operations are redefining performance benchmarks and drawing a younger, experience-driven demographic.
Advancements in technology and its integration continue to streamline operations, enhance customer experiences and allow for a focus on sustainable practice.
Looking ahead, increasing gaming revenues, strong cash generation and improving lending conditions are expected to support modest asset appreciation through 2026, with continued investor focus on well-located, high-performing A-grade venues.