Positive signs for city pub markets with lease sales

By on April 1, 2021 0

Sydney and Melbourne have both seen recent sales of pub leases within or outside their CBDs, suggesting operator confidence is slowly returning to the city’s markets.

Sales data and experiences from operators across the country suggested that in the post-containment environment, suburban and regional pubs experienced the strongest return of customers, while the CBD and surrounding areas suffered from the lack. businesses, tourists and day trippers.

This shift in clientele was strongly reflected in last year’s pub transactions, with regional pubs – especially in coastal and tourist areas – attracting high demand, as well as suburban pubs.

But recently, rental deals were announced in Sydney and Melbourne, suggesting some confidence in metro assets is back.

First, the acquisition of the Mountbatten Hotel in Sydney CBD Chinatown by JDA Hotels. The group – which owns several Sydney suburban pubs and two sites on the Gold Coast – paid $ 7.5 million for leasehold interest on the CBD site. JDA Hotels also has the Great Southern Bar, less than 100 yards up the street, and the nearby Charlie Chan Hotel.

The Mountbatten Hotel lease was sold by Surfside Hotels, which has operated the pub for 20 years. The off-market transaction was negotiated by Dan Dragicevich and Sam Handy of HTL Property.

Surfside Hotels still has three CBD establishments: the Market City Tavern, the Star Hotel and the Surry Hills Hotel.

“The Mountbatten has been a great location for Surfside Hotels and has complemented our South CBD asset portfolio,” said CEO Carolyn Kelly.

“As such, it takes comfort to me to know that another group so heavily invested in the venue is already taking the keys and will no doubt continue to serve the local community well.”

The Mountbatten Hotel has a 3 a.m. liquor license with a three-hour weekend game break and 25 EGM. The hotel was ranked 490 in the September 2020 ranking, however, it was previously regularly ranked in the Top 200 before George Street closed in 2015 for the start of light rail construction.

“The Chinatown precinct is notoriously tightly owned and, therefore, highly sought after by the market for its inherent fundamentals,” Dragicevich said.

Pub giants strike deal with Fitzroy

In Melbourne, Colonial Leisure Group (CLG) sold Bimbo’s leasehold interest in Fitzroy to Australian Venue Co (AVC). The off-market transaction was managed by Will Connolly of JLL Hotel & Hospitality.

The central mainstay of Brunswick Street, known for its inexpensive pizza and nightlife entertainment, has long been a beloved institution in one of Melbourne’s premier nightlife districts. He also holds a 3 am license.

As a sign of renewed confidence in Melbourne F&B’s proposals, the sale was negotiated and closed within days.

“The speed at which this iconic venue has been secured is certainly enjoyable and undoubtedly encourages other Melbourne pub operators who may be considering the potential divestiture of their venue,” said Connolly.

“The rental pub market is picking up momentum as operators begin to have a sense of certainty. This sale, along with our recent off-market transaction of the Grosvenor Hotel in St Kilda, provides the opportunity to continue transactional activity throughout the year. “

Customer confidence is also returning in CBD places, as shown by consumer spending data. A year-over-year analysis of me & u data showed that activity in urban sites declined 23 percent, year-over-year, while trade in suburban sites actually increased by 14 percent. hundred.

However, since December 2020, CBD sites have grown at a faster rate than suburban sites, as the easing of restrictions and the return to work in the office renew confidence in the sites in the capital.

Bimbo is centrally located on Brunswick Street, one of the city’s most vibrant nightlife areas.

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