By Andrew Starke
Private investors are continuing to chase hotel opportunities in Melbourne with two pubs changing hands in recent weeks for a combined total of $6 million.
In the larger of the two deals, the freehold investment of Richmond’s well known Mountain View Hotel sold for $3.5 million while the Normandy Hotel at Clifton Hill has changed hands for $2.5 million.
Both properties were purchased by private investors in deals negotiated by CBRE Hotels.
CBRE senior director, Scott Callow, said the sales highlighted continued demand for well located hotel investments, particularly those which offered development upside.
In the case of the Normandy, Callow said the new owner intended to reopen part of the property as licensed premises and would most likely redevelop the remainder as retail and residential space.
“Quality assets are continuing to attract strong interest, given the lack of prime hotels available in the current market,” Callow said. “We’re fielding particularly strong interest in the Francis Hotel, which we’re currently marketing in the Melbourne CBD.”
The Normandy Hotel was once one of Melbourne’s most popular Irish pubs and the property had attracted significant interest due to its prominent corner location, approximately five kilometres from the Melbourne CBD.
“Corner hotels located in prime locations around Melbourne are becoming harder to acquire with fewer opportunities coming to the market,” Callow said. “The Normandy Hotel provided an ideal basis for a buyer to either re-invent a classic local pub or undertake a redevelopment project.”
The second recent sale involves the Mountain View Hotel, which was once owned by VFL/AFL legend Ron Barassi.
A haven for drinkers before and after MCG games, the 70 Bridge Road hotel is still known by many locals as ‘Barassi’s’.
The hotel was sold with a 10-year lease to Bridge Road Hotel Pty Ltd, which is associated with the Cook Beaumont & Partners Hotel Group.
Cook Beaumont & Partners own and manage 29 outlets throughout metropolitan Melbourne, country Victoria and North Queensland.
The commencing rental is $225,000 per annum plus GST, with the lease including yearly reviews to CPI and market reviews every five years. Bridge Road Hotel will also have the option to renew its lease for five further five-year terms.
The Mountain View incorporates a large bistro which opens on to Bridge Road as well as a two-level first floor and a rooftop beer garden.
The next test of the market will be the upcoming sale of the Francis Hotel, which is being offered to the market for first time in almost 50 years.