Allawah Hotel to join high-profile Sydney pub sales
The White family’s private real estate investment firm is set to test the appetite of investors in Sydney’s hot pub market with the sale of the Allawah Hotel in the city’s south.
The investment continues a run of deal-making by the company which is quietly run by family scion Dan White, and which is not as well known as the Ray White real estate group.
The pub is expected to sell for about $35 million, with co-owners White and Partners and the Feros family’s JDA Hotels arm to reap the benefits of the strong interest in major Sydney pubs.
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Big players including entertainment mogul Justin Hemmes have been buying up pubs to overhaul and boost income from food and beverage operations.
The White family/JDA Hotels partnership also sold the Tennyson Hotel in Mascot to the acquisitive Mr Hemmes for just over $37m, in one of Sydney’s highest-priced pub auctions.
Merivale has already repositioned that pub, lifting the business from 91st in NSW when it was purchased to 39th position.
The Allawah Hotel was originally purchased in 2007 by JDA Hotels. Their stake was sold down two years ago when the Feros family took White and Partners into the hotel at a price of $28 million.
The two companies have already lifted its performance and have consolidated its gaming growth and won approval for a redevelopment.
Pubs in NSW have boomed as a new generation of hoteliers look to make their mark. The state’s sales volume in the last financial year hit $860.56m across 66 deals.
Sales in metropolitan Sydney accounted for over half the total by value, with a combined value of $589.62m across 30 separate transactions.
The average capitalisation rate for metro transactions was 8.1 per cent and a record was set for freehold hotels earlier this year with the sale of Manly’s Hotel Steyne for about $62 million to Iris Capital.
Boutique Sydney brokerage agency HTL Property is handling the sale of the Allawah Hotel, which is ranked 145 in NSW for gaming profitability. The large format hotel sports 30 poker machines, multiple bars, function rooms and bottle shops.
“Positioned directly opposite the Allawah train station, the property benefits greatly from passing vehicular and pedestrian traffic, as well as being the only hotel facility in the suburb,” HTL Property managing director Andrew Jolliffe says.
He says the hotel operation could be expanded into adjacent properties and annual revenues are already running at $9 million but the gaming revenues could also be lifted.
This article originally appeared on www.theaustralian.com.au/property.
