Dowling family sells Parap Tavern after 70 years to Charter Hall’s LWIP
Charter Hall managed Long WALE Investment Partnership (LWIP) is paying $19.7 million for a Darwin hotel owned for over 70 years by the Dowling family.
Parap Tavern at 15 Parap Road, Parap, is tenanted to Woolworths backed ALH Group for 14 years.
With options, the occupier can stay until 2084.
The sale price reflects a passing yield of about 5.65 per cent.
HTL Property’s Brent McCarthy and Glenn Price were the agents.
“We’ve been fortunate to represent a number of significant top end generation family organisations in multiple deals covering both the Northern Territory and Far North Queensland,” Mr McCarthy said.
“Whether that be vending ALH themselves into assets, or in the case of our recent mandate with the Dowling family, running a process to identify an applicable suitor for an A grade property asset backed by a robust covenant”.
Last July Woolworths announced it intention to combine its drinks business and ALH Group into a c$10 billion entity, Endeavour Group.
Save for the lease, Parap Tavern has significant development upside
The single-storey Parap tavern is attached to a drive through BWS bottle shop.
It has ranked regularly as a state top 10 gaming venue, the agents said, and known locally for its high quality food.
When it took over the leasehold six years ago, ALH immediately removed the venue of its topless bartenders and adult entertainment.
Save for the long rental agreement, the property has significant development upside, being at the north west corner of Hingston Street, adjacent to a restaurant and commercial precinct (story continues below).
It is also opposite Sentinel Property Group’s Arnhemica House, a nine year old, 2200 sqm office fully leased to the Northern Territory’s Department of Land, Planning and the Environment.
A Quest hotel is two blocks away.
Parap is about 2.5 kilometres north of Darwin.
Charter Hall chief executive officer David Harrison said the purchase “is in line with the Partnership’s investment strategy of owning triple net, long WALE, dominant ALH leased premises in growing markets”.
LWIP turns six
LWIP formed in late 2014 with a $150m commitment from each of Charter Hall Group and Hostplus prior to a $600m public offering.
The parties invested heavily again two years later.
Today a major shareholder also includes Charter Hall Long WALE REIT.
Its portfolio (ex-Parap Tavern) includes an interest in 60 assets worth a total of $428.2m, with a Weighted Average Lease Expiry of 14.4 years.
More than 80pc of LWIP’s income is derived from hotels with the balance from bottle shops.
The majority of its properties are in Queensland and Victoria (in Melbourne, they include Brunswick’s Moreland Hotel, Sunshine’s Glengala, Northcote’s Albion Charles, Thornbury’s Croxton Park and in Camberwell, the Palace).
