Investor pulls lever on $16m Cardinia Club purchase
One of the premier gaming venues in Melbourne’s outer south-east, the Cardinia Club, has been snapped up for $16 million by Stronghold Investment Management.
The hospitality and gaming venue in Pakenham has 105 gaming machines, a bistro, sports bar and function rooms.It was listed for sale by the Pakenham Racing Club last year, which holds an ongoing 13-year lease on the site.
CBRE Hotels’ Senior Director, Scott Callow, negotiated the sale and says the opportunity generated a “significant level of interest” from the market.
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“But it took an informed investor like Stronghold to recognise the strength of this opportunity with Pakenham Racing Club as its tenant,” he says.
After successfully acquiring the property Stronghold is projecting an initial cash return of 7.5% per annum for its wholesale investors.
The sale comes after the Pakenham Racing Club began relocating to its new Tynong track in 2008.
Pakenham racecourse was sold to a residential developer for $38 million in 2012.
The club held on to the popular gaming venue on a separate 1.65ha until May last year when it was put on the market.
Stronghold head of property Steve de Nys says the venue and ongoing lease presents a good opportunity for the group.
“Established in 1875, with circa 160 employees and three venues, our investors were attracted to the quality covenant offered by the Pakenham Racing Club,” he says.
“We understand this industry and like the proven trading history of this operation.”
Stronghold purchased the property as a trustee for the Stronghold Hospitality Property Trust No.15, a Brisbane based fund with several freehold investments in the hospitality industry.
The gaming venue sector remains strong in Victoria after the State Government introduced legislation changes including extending gaming licenses until 2042.
The new rules replaced a 10-year licensing regime, giving existing licence holders peace of mind.
The Labor Government also capped the total number of poker machines in the state for the next two decades.
