By Clyde Mooney
After only three months on the market, ‘the most significant on-premise and retail share opportunity’ has sold amid a hive of activity in Perth.
The Woolworths-backed ALH Group has snapped up the entire portfolio of 12 freehold pubs for a rumoured $86 million to increase its stable of venues to more than 290 across the country.
The struggling Compass Hotel Group (CHG) was put into receivership with Taylor Woodings in March after the St George Bank called an end to their escalating debt situation.
The decision to sell the assets was announced in June, with Jones Lang LaSalle Hotels and CB Richard Ellis appointed joint managers.
John Musca of Jones Lang LaSalle Hotels managed the sale and told TheShout that the new owners would be continuing operation of the venues, which are located around Perth’s metropolitan area.
Musca says that Western Australia is the tightest held hotel market in the nation with a sound commodities-driven economy, which no doubt contributed to the extreme interest in the sale and multiple portfolio bids being received from a broad range of bidders.
Compass built up the portfolio to around $190 million during the boom, but came unstuck when the international monetary collapse brought about unresolvable debt issues.
Their share price, first listed on the ASX in 2008 for around $1.00, traded around 1.5c in March immediately before the receivers were appointed.
It is likely ALH will need to invest in the future of the venues, with Compass previously admitting: “All operating venues require extensive refurbishment and this is considered critical to improve revenues and operating performance.”
Quentin Olde of Taylor Woodings, who conducted the sale program in conjunction with joint agents Jones Lang LaSalle Hotels and CB Richard Ellis Hotels, said the portfolio sale campaign was executed efficiently and thoroughly and the interest for the assets was strong.
“A broad range of parties participated in the sale process including large listed and private hotel groups, private equity firms and local hotel operators," he said.
“The success and speed of this outcome against the backdrop of some economic uncertainty, demonstrates there is demand for quality retail and hotel assets in the WA market.”
The Receivers will continue to operate all of the hotels and bottle shops in the portfolio on a ‘business-as-usual’ basis, until the sale to ALH Group is fully completed.
The Compass Group portfolio of assets consists of 12 hotels and bottle shops being:
- Albion Hotel
- Belmont Tavern
- Brighton Hotel
- Carine Glades Tavern
- Gosnells Hotel
- Greenwood Hotel
- Herdsman Lake Tavern
- Kalamunda Hotel
- Lakers Tavern
- Peel Alehouse
- Peninsula Tavern
Princess Road Tavern