Event sells office, resort as part of $250m divestment plan

Event sold Reef Cairns Plaza, formerly Rydges Cairns, in December.

Event Hospitality & Entertainment has sold a Sydney office and Cairns resort as part of plans to divest $250 million of non-core Australian real estate by 2023.

Announcing its first half FY21 results, the group added it won permission for two major commercial developments – both in Sydney’s CBD.

Event will bank $7.8 million from 201-203 Port Hacking Road, Miranda. Image: Google Street View.

The company was materially hit by COVID with revenue down 58 per cent to $294m – contributing to a statutory net loss after tax of $60.2m, chairman Alan Rydge said.

Event holds cinemas, hotels, offices and retail – some as investments – as well as land.

Closures, sell-down

Event today announced plans to sell $250m of non-core Australian real estate.

It has already offloaded two assets – an office at 201-203 Port Hacking Road, Miranda; it traded for $7.8m against a $5.25m valuation in mid-2018.

The company also found a buyer for Reef Plaza Cairns – formerly Rydges Plaza Cairns – at 50 Grafton St, with settlement due in April.

Two five screen cinemas have been closed ahead of sale – Townsville City and Adelaide City.

The group said it continues to negotiate with landlords in relation to rental abatement.

It recently exited its lease for an eight-screen complex at Arndale.

New property, renovations and approvals

Event added five ANZ assets to its portfolio in the second half of last year: Rydges Gold Coast Airport, QT Auckland, Rydges Formosa Gold Resort, Oval Adelaide and Tank Stream Sydney.

It also refurbished Rydges Canberra (formerly Rydges Capital Hill) and the five-screen Toowoomba Grand cinema.

The company created 75 car parks at Friday Flat in Thredbo too (story continues below).

“A key milestone was achieved with the approval in May, 2020 by the City of Sydney of the Stage One Development Application for the proposed 525 George Street, Sydney development for a mixed-use development of up to 43 storeys to include a podium with ground floor retail space on George St, a five screen cinema complex and a tower including a new hotel, conference centre and residential apartments,” a statement said.

“Subject to market conditions, this development is expected to take up to five years”.

Three months ago the same council granted Event permission for a podium extension at 458-472 George St.

This will expand QT Sydney by 72 suites and add retail, a conference centre and rooftop bar.

“A second development application will be lodged for a commercial tower above the podium,” the landlord said.

“Subject to market conditions this development is expected to take up to six years to complete”.

Event added it expects to deliver the office as a joint venture.

1HFY21 could have been worse: Event

Event’s entertainment business was the worst affected, it said, with many cinemas and studios forced to close.

The hotel arm – which holds Thredbo Alpine Resort – made a positive contribution.

The company’s chief executive officer, Jane Hastings, added that “as a result of transforming every part of our business” and “securing more than our fair share of scarce revenue opportunities” it is back in the black in January (even Thredbo recorded its first EBIDTA-positive January, given record mountain biking numbers).

“We have already seen the pent-up demand for our businesses, which was reflected in the outstanding result in Thredbo despite capacity restrictions of up to 50pc, strong leisure demand in hotels, and cinemas achieving an EBITDA positive result in January despite the Australian nationwide box office being down 50pc,” she said.

Only one film grossed more than $15m in the box office last half-year, compared to 10 for the previous corresponding period.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of realestatesource.com.au.