By Andrew Starke
The stand off between pub buyers and vendors appears to have ended, with sale agreements reached on close to $60 million in property last week.
Subject to the tenant National Leisure and Gaming (NLG) not taking up its first right to acquire the freeholds, the Royal Hotel at Ryde and the Lidcombe Hotel at Lidcombe will change hands – with both properties under contract to well established Sydney publicans.
In the case of the Royal, the freehold is to be acquired for $9.25 million by the high profile Malouf family, who already own the Coopers Hotel in Newtown, while the Lidcombe Hotel is set to be purchased by Marcus Levy and his wife Vanessa Sanchez in a deal valued at $6.55 million.
In a third Sydney sale, unrelated to Hedley, the Phoenix Hotel at Woollahra has changed hands for an undisclosed sum.
The ALE Property Group last week sold close to $37 million in hotels at an auction which attracted a great deal of interest and set a new yield record of 4.41 percent for an Australian freehold investment hotel.
CBRE Hotels director, Joel Fisher, said the increased activity signaled the end of the stand off between vendors and purchaser, which had limited transactions over the past twelve months.
“The three Sydney deals show that, at the right values, buyers are finding opportunities in the market to complete transactions with willing sellers,” Fisher said.
“For the right opportunity the market has become increasingly active – particularly for established publicans, many of whom have been watching the market for the past two years waiting for the right time to make a move.
“We see activity continuing to increase over the next few months as the market becomes more realistic about pricing and long term industry players move to capitalise on emerging opportunities.”
The Lidcombe Hotel and the Royal Hotel were both offered to the market as part of a $400 million Hedley portfolio sale.
The Lidcombe deal was negotiated on a yield of 8.3 percent which Fisher said was a strong result in the current market and at price which was $200,000 above the June 2009 book value.
“The deal shows the sharpest yield out of the four Hedley Hotels sales negotiated in the past fortnight and reflects the upside at the property,” he said.
The Lidcombe sale was negotiated by CBRE Hotels negotiator Daniel Dragicevich, who also concluded the sale of the Phoenix Hotel at Woollahra.
Dragicevich declined to comment on the sale of the Phoenix, which is located in Moncur Street in Sydney’s eastern suburbs.
The Royal Hotel sale was meanwhile negotiated by Fisher on a yield of 9.3 percent.