May lands Newcastle’s Surfhouse
May Hospitality has bought Newcastle’s Merewether Surfhouse for about $27 million with plans for a major refurbishment.
The three-level, 2277 square metre complex at 5 Henderson Parade, overlooking Merewether Beach, includes a restaurant, bars, event spaces and a ground-floor kiosk.
It was offered with about 35 years remaining on its lease and a peppercorn rent.
The vendors, Newcastle hospitality veterans Tony Green and John Tierney, involved in the development of the venue with Morris Green and Mark Swadling, sublet the ground lease from Sailor’s Rock for $12m in 2018.
Merewether Surfhouse
May Hospitality owner Ben May also operates the Burleigh Pavilion on the Gold Coast and Terrigal Pavilion, on the NSW Central Coast.
He previously held the Manly Wharf Hotel.
The Newcastle asset generates over $10m in annual turnover.
“My first job in hospitality was working for the vendors, Tony Green and John Tierney, at The Royal in Paddington and then The Greenwood North Sydney,” he said.
“As such I have enormous respect for what they have done over the years,” he added.
“We’re very excited to dive into Newcastle and get to know the locals,” according to the publican (continues below).
“It’s similar to Burleigh in so many ways”.
The deal comes four years since Glenn Piper bought the nearby Merewether Beach Hotel for $40m – a record for a Newcastle-region pub.
Unreplicable asset: agents
The speculated Surfhouse purchase price was against a $25m guide.
“May Hospitality has rewritten the playbook on how to fit out, operate, and enhance the patron experience in venues that offer unreplicable competitive advantages,” HTL Property’s Dan Dragicevich, who brokered the deal with Andrew Jolliffee, said.
“With a reputation for creating institutions in Manly, Burleigh and more recently Terrigal; [it is] sure to further enhance the already burgeoning visitation appeal of Newcastle,” he added.
“The interest generated during the campaign was exceptional, and entirely commensurate with the rarity of the opportunity and ability to build on the legacy so proudly established by industry stalwarts Tony Green, John Tierney and Mark Swadling,” according to the agent.
Interest came from local high-net-worth investors and operators,
Mr Jolliffe said “premium hospitality product is more desirable to investors today than ever before, with its magnetism highlighted by the depth of the non-traditional buyer pool we unearthed; and illustrating the fact that high cash flow landmark venues will always attract and maintain a premium”.
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