Iris Capital is paying $45 million for south west Sydney’s Narwee Hotel – a deal which could end the year as the priciest for an Australian pub.
The Top 150 gaming venue rises three storeys and includes 14 accommodation suites as well as the drinking and dining spaces.
It occupies a 3370 square metre plot at the north east corner of Penshurst and Hannan streets, opposite a nine level apartment building and Narwee train station.
The suburb is 18 kilometres from the city.
Last week, Iris Capital, led by Sam Arnaout, paid AccorInvest c$180m for 17 tourism hotels – the bulk of iProsperity’s distressed portfolio.
Sydney hospitality eras ending after over three decades
Narwee Hotel was offered by the Ryan family which owner occupied since 1987.
Another recently sold venue – Dulwich Hill’s Gladstone Hotel – was owned for 43 years.
“I’m delighted to have purchased the Narwee Hotel from the Ryan family, and recognise the significance of selling a business having owned and operated it since 1987” Mr Arnaout said.
“The sale process was clinical, and the impressive presentation and positioning of the asset satisfied not only our key investment criteria, but also met a geographical objective we held for that part of Sydney” he added (story continues below).
Narwee pips Macquarie Tavern by $2m
HTL Property, which is behind the Narwee and Courthouse hotel deals, said the record low interest rate environment is driving demand from established investors especially for A-grade properties.
“When we consider the origin of the most recent capital deployment events, it is almost exclusively linked to leading groups such as Redcape, Merivale and Iris Capital,” the agency’s managing director, Andrew Jolliffe, said.
“This is instructive on a range of levels, however most notable is the fact that some particularly experienced actors within the asset class are the ones who are prosecuting the most definitive acquisition strategies,” according to the executive, who represented the Ryan family with Dan Dragicevich and Sam Handy.
“Our clients engaged us to run a discreet sale process in order to canvass interest from our database of active investors, and the short list comprised parties with both the capacity and intent to make significant acquisition at a price point commensurate with the hotel’s status and opportunity,” Mr Dragicevich added.
“The previous highest price paid this year was for the Macquarie Tavern we sold on behalf of Monarch Hotels to the De Angelis family for $43m, and whilst it is rewarding to have the top two sales, it is more important for the industry to have rebounded so prominently following the challenges visited upon us this year”.
According to the agency one Australian hotel a week sold this calendar year.
“Transaction volumes are operating nationally at around 70 per cent of those achieved during the same period last year, however the cadence for activity has quickened demonstrably over the past eight weeks,” Mr Jolliffe said.
“Portfolios are being realigned just as urgently as they are being reimagined and it really is a landscape where the fast are outperforming the slow, as distinct from simply the big consuming the small”.