Investment Grade Hotel Backed by Coles for Sale by HTL

ASX listed Hospitality Property Investments (ASX: HPI) has exclusively engaged specialist brokerage firm HTL Property to sell the popular Barron River Hotel freehold in Cairns.

The investment grade asset is leased to a subsidiary of Australia’s second largest pub operator, being a joint venture between Australian Venue Co (AVC) and the Coles Group (ASX-COL). The supermarket giant operates in the Hotel space in a 50-50 joint venture where AVC operate the on-premise hotel business operations; and Coles the package liquor off premise business.

AVC who operates 180+ venues across Australia & New Zealand is majority owned by investment house KKR.

The property is located in Stratford, only 6.8kms* from the Cairns CBD.

“The asset is a quality operated and backed offering, providing investors with a long triple net lease** (having fixed 4% annual increases until 2046***) and strong asset fundamentals which support investment grade objectives” commented HTL Property Director, Glenn Price.

“The annual income for the property is $338,528+ GST^, with the tenant paying all outgoings**; and favourably, the Liquor Licence & 35 Gaming Machine Authorities revert to the Landlord at the expiration of the lease for $1.00” advised HTL Property Director, Brent McCarthy.

“The hotel’s gaming machine authorities alone have a current day value at $4.2m” added McCarthy.

In what has proven to be a robust market in recent years, investment grade assets are now highly sought by investors across all property sectors, as the hotel industry has exhibited great resilience throughout the CV-19 pandemic; as evidenced by the Qld record sub 4% sale of Brisbane’s Royal Exchange Hotel by HTL Property last year.

“Investors have warmly identified with the magnetic attributes regarding the long term nature of passive A grade leases such as this one; and in particular, take great comfort in tenancy covenants the strength of what is being offered here by QVC” concluded HTL Property Managing Director, Andrew Jolliffe.

The Barron River Hotel is being offered for sale by way of Public Auction, to be held on Thursday 28 April 2022, at 1 Margaret Street, Sydney. Facilities for interstate bidding will be available in both Brisbane and Melbourne via an on line platform.

End.

^ estimated as at 13 /6/22

*approx.

** excluding land tax

*** including options