Wall Street group set to buy Melbourne’s Espy Hotel
Wall Street giant KKR is circling Melbourne’s much-loved Espy Hotel in St Kilda.
The move is part of a play by the Australian Venue Company, that is headed for a $1 billion float on the Australian Securities Exchange.
The KKR-backed group is finalising a deal to pick up the Espy owner, the Sand Hill Road pub group, for about $75 million.
The private company owns a network of about a dozen pubs across Victoria and would be integrated into the 157-strong network of hotels that the KKR-backed Australian Venue Company already owns ahead of a float.
The Hotel Esplanade St Kilda is among Sand Hill’s best known venues and points to its focus on entertainment venues rather than primarily poker machine revenues that drive many of its rivals.
Inside the beer garden. Picture: Jason Edwards
The move by the food and beverage-focused pub operator also shows its ability to expand, even ahead of a public listing, and is a pointer to its strategy of growing once on the public bourse.
The only other major listed pub group, Redcape Hotel Group owns and operates 32 mainly gaming-focused venues.
The Australian Venue Company is now testing investor appetite for its listing with offshore investors via investment bank Citi and the impending purchase could help sell its story more widely.
The pub company has been expanding and last year bought a slice of the Coles empire of pubs.
KKR took an 80% stake in Bruce Dixon’s pub group in mid-2017 for about $190 million. It was then renamed Australian Venue Company and was expanded early last year.
It now runs Coles’ 87 Spirit Hotels venues in Queensland, including about 3000 poker machines. Coles is handling the bottle shops.
Sand Hill Road is a privately-owned, Melbourne-based hospitality group that was founded in May 2000, and has owned, developed and operated 12 different hotels.
It has sold a few venues off along the way and it has overhauled the St Kilda’s iconic Hotel Esplanade, lovingly known as The Espy.
The company started the Commercial Club Hotel in Fitzroy that was later sold in 2003. That first venture led Sand Hill to eleven others.
The company own and operate Hotel Esplanade St Kilda, Garden State Hotel, Waterside Hotel, Richmond Club Hotel, Prahran Hotel, Bridge Hotel, Terminus Hotel, The Posty and Holliava.
Along the way, Sand Hill Road sold The Loft in the CBD and the Heritage Hotel in Rockhampton,. The company is also about to launch a full rebuild of Melbourne’s iconic Waterside Hotel.
This article originally appeared on www.theaustralian.com.au/property.
