Americans buy St Kilda’s Esplanade Hotel for $75m
St Kilda landmark the Esplanade Hotel has been sold to a US private equity giant as part of Australian Venue Company’s acquisition of eight Sandhill Road Group venues.
The KKR-backed company splashed out about $75 million for SRG’s Melbourne-based pubs, which also include the Richmond Club, The Posty and the Prahran Hotel.
The purchase, flagged by The Australian in January, took the private company’s network of hotels to 157 venues, and is part of their move towards a $1 billion ASX float.
In a statement, AVC chief executive Paul Waterson says the addition will complement the company’s “high quality, community-focused” venues.
The Espy’s striking new beer garden, featuring a retractable glass roof and ocean views.
“We have long admired the work of Sand Hill Road and everything that they have achieved in re-imagining and restoring run-down pubs,” Waterson says.
“It is a privilege to be entrusted with ownership of these Melbourne establishments and to add such an innovative and driven approach to our group.”
The purchase caps AVC’s rapid growth over the past six years. In 2014 the company owned five venues, but now employ over 5000 staff across their portfolio.
In mid-2017, Wall Street-based KKR purchased an 8% stake in Bruce Dixon’s Dixon Hospitality pub group for around $190 million.
The interior now: a mix of old world charm and contemporary flair.
The group already owns a large collection of Melbourne-based pubs including Harlow, Imperial Hotel Bourke Street, Middle Park Hotel and The Duke. It also runs Cole’s 87 Spirit Hotels venues in Queensland, after purchasing a slice of the pub empire’s portfolio in 2019, which included around 3000 poker machines.
The 140-year old Esplanade Hotel was purchased by SHR in 2017 and operated primarily as an entertainment venue, in contrast to many of its rivals, which depend on poker machine revenue.
The acquisition by the food-and-purchase pub operator demonstrates their ability to expand ahead of their public listing. Listed with Citibank, the purchase may boost AVC’s attractiveness to investors. Andy Mullins, co-founder of SRG, said that the focus on community expectations made AVC a logical fit. “Most importantly, we want to thank each and every customer who’s shared a beer and a laugh across our bars,” he said.
This article originally appeared on www.theaustralian.com.au/property.
