Hotel Property Investments (ASX Code: HPI) has entered into agreements to acquire three hotel properties for a combined $63.3M across both Queensland and Victoria.
The three properties, Queensland’s Mango Hill Tavern & First Choice Liquor, along with both and The Jubilee Tavern in Airlie Beach as well as the Summerhill Hotel in Metropolitan Melbourne, represent a weighted average capitalisation rate of 6.40% for the fund.
The tightly held national pub market has been starved of AAA grade quality Freehold Hotel Investment assets for a number of years, and which has consequently led to HPI pursuing assets held by long term private Hotel operators. HPI’s recent transactions have included the purchase of the Gregory Hills Tavern, Sydney ($40M) & The Acacia Ridge Hotel, Brisbane ($20M) also through HTL Property in March 2020.
“The acquisitions announced today represent the continuation of HPI’s strategy of acquiring high quality properties in attractive markets which are leased to quality operators on long lease terms” HPI’s Chief Executive Officer, Don Smith advised.
The Jubilee Tavern is a sprawling Tavern with 45 Gaming Machines, Public & Sports Bar with large Bistro, drive-thru bottle shop and impressive children’s play area on a 6,750sqm allotment just 2.5km from Airlie Beach.
The Mango Hill Tavern is a large format Tavern on Brisbane’s northside which encompasses a large format Tavern operation, First Choice Liquor Barn, service station and specialty tenancies. The site was purchased for $31.3M reflecting an initial yield of 5.65% and a combined WALE of 6.6 years.
The Summerhill Hotel in Melbourne’s North was also acquired for $22.7M.
HTL Property congratulates HPI on their most recent acquisitions, which add further weight to their already impressive portfolio of now 48 Hotels nationally.
“HPI have again identified quality assets with leases to long term corporate and private hotel operators underpinned by strong land values and business fundamentals. Their forward thinking within the sector bodes well for shareholders and future investors” advised HTL Property Director, Glenn Price.
“With HPI’s strategic direction now patently clear, it provides generational hoteliers the opportunity to free-up their balance sheet for further acquisitions and a realignment of their business models, with a landlord who is there to work with its tenants on a long term basis” added HTL Property Director, Brent McCarthy.
The two Queensland assets are expected to settle by the end of this year, and it is understood the Melbourne asset will settle Q1 2021.
The owner of the Jubilee Tavern, Mr John O’Neil, congratulated HPI on its acquisition of the Freehold Property which he has held as a Going Concern operation for over 20 years.
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