Bondi Asset Management (BAM) have picked up a second western Sydney hotel for their pub fund, purchasing the Lone Pine Tavern in Rooty Hill.
The large format hotel, which was sold by the Feros Group for $26 million, includes a public bar, TAB and wagering bar, bistro and bistro bar, gaming lounge with 28 gaming machines, function room, large beer garden, children's play area and drive-through bottle shop. It also sits on a one-hectare site and is licenced to trade until 3am.
The sale was handled by JLL Hotel & Hospitality’s director, John Musca, who congratulated BAM on an “outstanding acquisition".
Stuart King, CEO of BAM, explained the the Lone Pine Tavern was chosen as the pub fund’s next asset, due to its great value and potential – it’s situated 100m from the Rooty Hill train station and the area is currently developing.
“The Feros Group had done a great job in bringing the hotel to where it is now. There is a great food offering bringing the patrons in and a very healthy Friday and Saturday night trade. We plan to run it as it is for at least the first 6-12 months and look for opportunities,” stated King.
King also explained that he expects the hotel will offer a great ROI for the fund’s investors.
“The hotel was purchased at a yield that is well in excess of other similar hotels in Western Sydney, which made it look attractive to us.
“We are expecting to be able to offer investors a distribution stream in excess of 15 per cent per annum, along with some substantial capital upside as we rejig the concentration of earnings away from the more volatile Friday and Saturday night trade.”
The Lone Pine Tavern is the second western Sydney pub the fund has purchased, having acquired the Vauxhall Inn in Granville in February.