Adelaide-based Duxton Pubs adds three SA pubs to its interests
An Adelaide-based pub investment fund will tap investors for up to $20 million in additional capital after agreeing to take over three pubs in South Australia.
Duxton Pubs has agreed terms with the owners of the Cremorne and Old Noarlunga hotels in metropolitan Adelaide and the Woolshed Inn in Bordertown, and will soon take over the freehold and leasehold interests.
All three properties will be given a makeover by their new owner, with the Woolshed set for the biggest changes as part of a multimillion dollar upgrade inspired by the success of Adelaide Hills pubs, the Crafers and Uraidla hotels, which are owned by Duxton’s Ed Peter.
Mr Peter recently teamed up with prominent Adelaide hoteliers Martin Palmer and Brett Matthews to launch Duxton Pubs, with the The Lion Hotel in North Adelaide becoming the fund’s maiden investment last year.
Mr Peter said Duxton would puts its own stamp on each of its three newest acquisitions, while it continued to negotiate the purchases of several other venues in metropolitan and regional areas of SA.
“They all fit the demographic we like – they’re all good assets, we like the communities and by spreading ourselves out a little bit we like the footprint we’re creating,” he said.
“The Cremorne, with a little bit of love and care, will end up a lot more like The Lion in terms of look and feel, and hopefully it will appeal to the community.
“The Old Noarlunga, in terms of the DNA of what we like, fits perfectly – we couldn’t have found a better pub.
“And the Woolshed will get a major change – it’s an unbelievably beautiful asset and with a bit of love and attention it could end up being another Crafers or Uraidla. It will be given a kiss of life and I think the community will be really happy.”
Duxton Pubs is targeting the SA pubs market which includes about 620 venues.
It plans to list on the Australia Securities Exchange within four years, and has a long-term ambition to become a top three pub owner nationally.
Last year the fund raised $25 million from investors, while other family groups led by Mr Palmer and Mr Matthews chipped in a further $15 million for acquisitions.
Mr Peter said Duxton would seek up to $20 million more from investors in the next couple of months to fund future purchases, with several sites in advanced stages of due diligence.
“We were able to deploy the funds and get assets at prices that work for us so we’re probably going to open up and do a little bit more – the first round was very much family groups and it was clearly oversubscribed,” he said.
“There are two more assets which I’m very close to doing and then I can say we’ve got more headroom, we can take more capital because I can deploy it.
“We’ll go back to our original investors because we had people who wanted to put in more money – if there’s a couple of new people who want to join then we’ll welcome them in.”
Collectively, Mr Peter, Mr Palmer and Mr Matthews own 19 venues across SA, including the Stirling, Uraidla and Crafers hotels, 2KW Bar & Restaurant and Paloma Bar and Pantry.
Mr Peter said the venues were trading “very well” as the hospitality sector emerges from COVID-19.
“We’d always hoped we’d do well but we’re on the better side of our expectations.”
Mr Peter’s Duxton Group oversees a suite of listed and unlisted investments, including ASX-listed companies Duxton Water and Duxton Broadacre Farms.
This article first appeared on www.theaustralian.com.au/business/property.
