Who will buy The Oaks Hotel Neutral Bay? Laundy family, Rich Listers, fund managers among potential buyers of Sydney pub for sale
Regarding The Oaks and other big-ticket hotel deals, Musca says these properties and businesses have benefited from decades of planning, licensing, gaming and capacity approvals in prime locations it would be nearly impossible to replicate as new developments.
“Basically, the best hotels in the best locations are just going to enjoy perpetual, unfettered profit growth, without competition.”
$175 million would set a record
Stuart Laundy, son of billionaire pub owner and Rich Lister Arthur Laundy, has confirmed his family will be among those looking closely at The Oaks as a potential acquisition opportunity.
He said he couldn’t say if it was worth $175 million because he had “no idea” yet of its revenue or other performance numbers, but said “if anyone paid $175 million tomorrow, that wouldn’t surprise me.”
“Ads are a safe option. People have always had a drink and a kick, that’s not a bad deal. Even during the Great Depression, pubs were still pouring beers,” he said. AF weekend.
The market will determine whether The Oaks is worth as much as the selling agent JLL quotes – if it were to reach $175 million, it would set a land rate record for residential and commercial properties on the Lower North Shore.
Generating approximately $23 million in annual revenue, The Oaks comprises several bars, including Taffy’s Sports Bar, Bar & Grill restaurant, games room with 30 poker machines, extensive first floor reception areas and upscale bottle store. There is also the potential for a five storey development.
The Crossroads Hotel sold with 30 electronic gaming machines which fetch over $300,000 a week, a restaurant serving over 4,000 meals a week and a large accommodation complex on a 1.28 hectare site, six times bigger than The Oaks.
“Assets such as Crossroads Hotel and Strathfield Hotel are frankly inimitable and have enjoyed robust revenue platforms separately for decades,” said Andrew Jolliffe of HTL Property, who brokered the record sale of the two properties.
That doesn’t mean the industry is immune to a crash, as happened during the global financial crisis, when a mountain of debt brought down big pub giants like National Leisure and Gaming and Hedley Group.
However, this time around owners are much less in debt and good operators are generating healthy operating margins in excess of 20%.
“Compared to other periods, the loan-to-value ratio is actually at an industry low, with the average below 50%. As a result, Australian pub capitalization has rarely been more balanced,” explains Jolliffe.