Charter Hall snares two pubs, bottle shops

The Highbury Hotel and Dan Murphy’s occupy a 1.2 hectare block.

Charter Hall has added two north east Adelaide pubs to its book.

With options, ALH can lease the Highbury property until 2071.

In Highbury and Golden Grove, the assets are leased to ALH Hotels, a subsidiary of Endeavour Group, with which Charter Hall co-invests in this sector.

Both investments contain Dan Murphy’s stores.

They also occupy Activity Centre zoned blocks.

JLL’s Will Connolly, Ben Parkinson, John Musca and Stuart Taylor were the agents; David Fitch was the seller.

Low yields

In the pricier deal, Charter Hall is outlaying $29 million – reflecting a 5.27 per cent net passing yield – for the Highbury Hotel, 14 kilometres from town.

On 1.21 hectares, 1017 Lower North East Road, at the north west corner of Valley, contains a 1233 sqm bottle shop and 1490 sqm pub with 40 electronic gambling machines.

Around the standalone buildings are over 100 car parks.

ALH is on a lease expiring in 2031 with four 10 year options.

Meanwhile at Golden Grove, seven kilometres north of Highbury, Charter Hall is paying $28m for the Village Tavern (pictured, top).

On 7700 sqm in the town centre, near The Grove shopping centre, which is Aldi, Big W and Woolworths anchored, this venue contains 40 EGMs too.

This deal was also struck at a 5.27pc net passing yield (story continues below).

Charter Hall and Endeavour purchased the Terrey Hills Tavern in 2021.

ALH’s lease here expires in 2030, also with four 10 year options.

Both the Golden Grove and Highbury rental agreements allow for fixed increases linked to CPI, but capped between 3-5pc.

It is speculated Charter Hall will hold the assets in the Long WALE fund.

The deal comes 14 months since the manager, with Hostplus, bid $1.68 billion to acquire ALE Group, the country’s largest freehold pub owner.

Charter Hall, ALH back another pub

The Highbury and Golden Grove acquisitions come five months since Charter Hall with ALH paid GM Hotel Group $32m for the freehold going concern of the Emu Hotel and an associated bottle shop, at Morphett Vale – 25 km south of Adelaide.

In mid-2021, Charter Hall and Endeavour teamed again to snap up the Terrey Hills Tavern freehold going concern, in Sydney’s Northern Beaches, for $39.8m from the Feros family.

“Demand from investors for both retail and hotel assets continued at pace in South Australia over 2022 with a combined investment volume more than $440m for the year,” Mr Parkinson said, following the latest deals.

“We continue to see sophisticated investors in Adelaide chasing AAA-grade covenants whilst taking advantage of zero stamp duty payable on commercial assets,” according to the executive.

The $32m paid for the Emu Hotel, he added, was the biggest price paid for a single asset Adelaide pub.

On 7300 sqm beside the Morphett Vale Shopping Centre, that venue also includes 40 EGMs.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of