HTL Deliver a Sparkly Price for Southern Highlands Argyle Hotel

The freehold of the Argyle Hotel in the picturesque Southern Highlands township of Moss Vale has sold for $10,500,000, which represents a sub 5% yield.

The successful sale was exclusively negotiated by HTL Property’s Blake Edwards and Sam Handy; on behalf of private owners.

The imposing hotel was sold to a local investor with existing business interests within the Moss Vale area.

With a combined 15 years left on the lease and with favourable net lease terms and a current passive rent of $505,714 + GST per annum, the Argyle Hotel occupies a high-profile position on the Illawarra Highway within the town centre of Moss Vale.

The town counts national retailers such as Coles, ALDI, Harvey Norman, BWS & McDonalds as flagship retailers, and is set to welcome a forecast of 5,000 additional residents once the nearby Ashbourne Masterplanned community is completed.

The very popular suburban hotel is set across an expansive 1790sqm site, with ownership of the liquor licence and 15 x gaming machine entitlements included in the sale. The in-situ value alone of these gaming assets is currently estimated at approximately $5,250,000

“The Argyle Hotel is a highly regarded suburban hotel operation within the Southern Highlands of NSW, and the stability offered by the business’s trading fundamentals and covenant quality, in combination with a protected local business model, made this a compelling acquisition target for the sophisticated investor market” advised HTL Property Director, Blake Edwards.

“This was clearly reflected by the fact the freehold was sold within less than a week of the campaign closing, and furthermore by the 4.80% passing yield achieved” Edwards added.

Assets with covenants the quality of the Argyle Hotel seldom become available. However when they have, as was the case in 2022 in the form of the Amaroo Tavern (Dubbo) and New Albury Hotel (Albury); the results have illustrated the willingness of the market to secure high grade opportunities.

“This strong sale aligns with the most recent transactional evidence in the form of significant regional New South Wales freehold investment hotels being the Amaroo Tavern (Dubbo) and the New Albury Hotel (Albury); which delivered yields of 4.10% and 4.09% respectively” advised HTL Property Director, Sam Handy.

“The combined depth of the buyer universe and passing yield achieved underscores the magnetism of freehold pubs as an asset class, with the strength of the tenant covenant and the relative scarcity of investment grade hotel opportunities across New South Wales adding weight to supply imbalance when considered in the context of the unsatisfied demand” concluded Handy.

End.