Tea Gardens Hotel trades for $75m as pub families bet on sector recovery

The Tea Gardens Hotel has sold for $75m as pub families bet on the sector’s recovery.

Sydney’s pub market is making a mid-year comeback with another famed industry family, the Ryans, striking the largest deal of the year nationally with the $75m purchase of The Tea Gardens Hotel in Bondi Junction.

The size of the transaction shows that experienced publicans are willing to fork out large sums to secure ownership of the city’s best pub properties, as they see that earnings will grow as customers have more to spend as tax cuts roll through and interest rates trend downwards.

The pub market had come under pressure earlier in the year from both rising rates and a souring in consumer sentiment which hit food and beverage spending, but there is now more optimism in the market after a series of large transactions.

The flagship hotel was sold by the Purkis family, which bought the pub for about $35m a decade ago. “We have thoroughly enjoyed our time owning and operating this significant hotel, and wish the Ryan family every success moving forward,” publican John Purkis said.

The off-market sale of the multistorey large format hotel to respected hoteliers John and Sally Ryan, was handled by HTL Property managing director, Andrew Jolliffe.

The pub is nestled in a neighbourhood that includes Westfield Bondi and the Easts Club, which also has major transport interchanges.

“Bondi Junction is, in and of itself, a bustling CBD; and in the sparsely represented hotel landscape that is Sydney’s Eastern Suburbs, the Tea Gardens enjoys an iconic status borne from a history of extraordinarily reliable and voluminous multi-departmental revenue generation,” Mr Jolliffe said.

The sale of the Tea Gardens Hotel, is the record sale nationally for 2024, and shows how confidence is returning to the market after some deals – like the mooted $170m sale of The Oaks Hotel in Neutral Bay – which did not proceed.

But sentiment has turned around in the wake of the Laundy family stepping back into the market this year as a buyer of two high-profile Sydney pubs and the Redcape Hotel Group also selling off three large pubs.

Earlier this month, billionaire hotel mogul Arthur Laundy swooped on one of the city’s oldest properties, buying the heritage-listed Lord Nelson Brewery Hotel in The Rocks along with its accompanying accommodation and brewery in a deal worth more than $20m.

The Laundy family also bought The Light Brigade Hotel in Sydney’s Woollahra for $20m in June.

More deals are expected this year as banks are also supporting investors in the sector, which is recovering at an operational level.

“A series of discreet discussions, held over a very short period of time, has led to the largest single pub sale nationally for 2024. As such, we are delighted to have matched our valued clients in the form of the Purkis and Ryan families respectively, in order to conclude a transaction so mutually favourable to both,” Mr Jolliffe said.

The Bondi Junction pub has 30 poker machines and multiple bars, including a rooftop beer garden, as well as large underground space that was once used by NSW brewer Tooth & Co.

The Ryan family own venues ranging from Ryan’s Bar at Australia Square, The Paragon and Ship Inn at Circular Quay and The Orient Hotel in The Rocks, as well as The Covent Garden Hotel in Chinatown. The Purkis family have pubs in the Sutherland Shire, Rooty Hill and Parramatta.