The Good Beer Co has sold Randwick’s Duke of Gloucester Hotel to Justin Hemmes’ Merivale Group for about $32 million – the latest in a string of eight-figure hospitality sector deals.
The purchaser owns the Royal Hotel Bondi, Coogee Pavilion and Woollahra’s Hotel Centennial – all also in Sydney’s east.
JLL Hotels & Hospitality Group’s John Musca and Ben McDonald connected it to the latest pub, which was being marketed privately after a renovation.
Other hoteliers, as well as unlisted investment funds and high net worth families and advisory firms “fiercely contested” for the asset which traded five days after bids were sought, the agents added.
Good Beer Co owner John Azar said the DOG, the acronym some call it, “has been a fantastic hotel to own [in a] great local community to be part of”.
Duke of Gloucester Hotel
The going concern investment typically generates $180,000 in weekly revenue inclusive of the 19 electronic gambling machines.
It has a 2am liquor licence.
Good Beer Co, on behalf of a syndicate, acquired it unrenovated in 2015 for $16.5m.
The 1930s hotel was temporarily listed for public sale last March, the vendor saying at the time it would redeploy proceeds to other projects including Surry Hill’s Keg & Brew (story continues below).
Earlier this month, JLL sold Dulwich Hill’s Gladstone Hotel (pictured, right), and two adjacent bottle shops, to Redcape for $38m.
That pub was held by Craig Coote since 1977.
Other agents also offloaded a portfolio of three gaming-based assets – Brisbane’s Mango Hill Tavern (for $31.5m) and Airlie Beach’s Jubilee Tavern ($9.7m), in Queensland, and in Melbourne, the Summerhill Hotel and adjoining Chemist Warehouse ($22.7m) – to Hotel Property Investments.
Darlinghurst’s Courthouse Hotel also traded to Moelis Australia for $22m.
Mr McDonald said the Randwick deal highlights “the strong underlying property fundamentals of Sydney’s eastern suburbs coupled with the robust trading profile”.
“As the NSW economic recovery gathers momentum, we have seen the market for operating real estate assets swell as capital is put to work in search for the stronger yielding opportunities that hotel[s] offer.
“The current weight of capital and its divergent private and public sources, continue to drive transaction demand not seen over a decade, yet again illuminating the asset class’ undeniable investment attributes”.