By Andy Young
The Marlborough Hotel in Newtown has been sold by the John Singleton backed Australian Pub Fund to a company managed by Bruce Solomon and Matt Moran's leading hospitality group Solotel.
The sale represents the fifth successful sale in as many months for the Australian Pub Fund, leaving the group with five venues – three in Sydney and two in Brisbane. The Marlborough Hotel will become the fifth Newtown venue for Solotel.
“Solotel is delighted to add to the Marlborough Hotel to the existing four hotels we manage in the Newtown area. Solotel will be by the end of this year operating over 30 hospitality businesses in Sydney and Brisbane,” Solomon said.
Ray White’s Asia Pacific Director Andrew Jolliffe, who was the exclusive agent for the hotel, said the sale came after significant local and international interest.
"Ultimately, and as we have often experienced, it was expert domestic knowledge in the form of the well-known hospitality management company Solotel, which prevailed above wide interest in order to secure this generational piece of hospitality property,” Jolliffe said.
"However it should also be said that the level of international interest was significant; and is reflective of material off-shore equity tranches looking for a home in high yielding Australian property investments with exposure to management functions, and business operation."
Australian Pub Fund Director Matthew Beach said the sale worked with the fund’s overall strategy.
"Consistent with our strategic objectives, we have divested a number of pubs where we feel the price the market has offered reflects the value of our assets. We will continue to apply this strategy where applicable. Our strategy of buying the best pub assets within each local market area has attracted experienced buyers to pursue the acquisition of our assets," Beach said.
Jolliffe would not be drawn on the price paid for the Marlborough Hotel, other than to confirm the successful sale price achieved was entirely consistent with the guidance provided throughout and before the EOI divestment program. He also said the sale highlights the strength of the pub market and that a new class of freehold hotel has begun to appear in the form of Super A Grade hotels.
"Amongst a number of others, over the past six months we have sold six landmark freehold hospitality properties we believe can be distinctly classified as Super A Grade hotels; and accordingly, which bear an amalgam of unique characteristics such as prominent locations, significant, and high quality commercial property sqm coverage,” Jolliffe said.
“Often adjacent major transport centres and other key drivers of patronage such as universities, shopping centres and major residential development. In addition to the strong property fundamentals referred to above, acquirers of Super A Grade hotels seek exposure to business models which enjoy multiple revenue streams, preferably incorporating the ownership and operation of gaming devices, and with both heritage and evidence of deep historical revenue generation.”
He added: "We have approximately $125m worth of other Super A Grade hotel assets currently under agreement nationally, and consequently can see well beyond 2017 in terms of positive runway and a compelling investment argument to support longevity in terms of demand for this asset class."