By Clyde Mooney

Having secured $31 million in pub sales to date this year, leading national pub real estate broker, CB Richard Ellis, sees a strong future in the sub-$10 million market.

March and April brought strong figures for CBRE, which sold Glebe's Australian Youth Hotel for the greater than expected figure of $5.1 million and Rozelle's Welcome Hotel the previous day for $6.5 million, reflecting stronger than expected yields from the former Damien Silk venues.

Similarly, The Entrance's Lakes Hotel sold to a private investor for $8.15m, representing an initial yield of 13 per cent.

CBRE's Joel Fisher said demand for freehold 'going concern' assets below $10 million remained the strongest, but "there does remain some disconnect between purchaser and vendor expectations".

CBRE's Daniel Dragicevich told TheShout the agent is expecting enough buyer competition to bring good results for pub vendors in the latter half of this year, "but only on specific asset types".

"The market appears to be quite thin at the top end as access to debt is still limited, however in the sub-$10M freehold and leasehold market where the buyer pool seems deeper, we do envisage competition between purchasers being created and some stabilising of cap rates to occur as a result." 

The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.

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