By Clyde Mooney
Some of the country's most successful and savvy investors in hospitality are beating a path to pub bargains as the timing becomes right to pick up assets at "rock bottom" prices.
Speaking to TheShout, Riversdale's (www.riversdalegroup.com.au) Patrick 'Paddy' Coughlan said: "We are actively looking for assets again. Riversdale is on the acquisition trail."
Coughlan joins advertising magnate John 'Singo' Singleton, former Qantas chief executive, Geoff Dixon, founder of Mojo advertising, Alan Johnson, and investment banker, Mark Carnegie, in forming a new investor group looking to begin trading early in the new year.
"The general view we met the other day is that valuations in the pub market have probably hit rock bottom," Dixon said in media reports. "It is not going down any more, but we see there is still some pretty good value out there."
The new $200 million fund is spawned from the successful Riversdale group, and intends to pursue a similar style of venue: "Good, well-rounded assets not heavily weighted to gaming, with a trading upside through better management," said Coughlan.
The as yet unnamed fund will be initially be made up of $100 million in equity, with the same amount coming from bank debt.
Finance restrictions at the smaller end of the sector are not likely to affect these operators, with the positive moves towards acquisitions a good sign of industry health.
Riversdale began operations in May last year, with the purchase of Kinselas in Sydney's Darlinghurst.
Since then the group has gone on to purchase the Peakhurst Inn, Glebe's Toxteth Hotel, Balmain's Unity Hall and the Bellevue Hotel in Paddington, some of which are currently undergoing extensive renovations.