The large format North Nowra Tavern has sold to Pub Invest, a private equity consortium headed by ex-Citigroup banker Damian Kelly.
The sale heralds Pub Invest’s fourth hotel purchase, having steadily acquired the Crown Hotel (Surry Hills), the Corrimal Hotel (Corrimal) and the Rose and Crown Hotel (Parramatta) over the last few years.
“This acquisition illustrates our investment vehicle’s fourth transaction in an asset class we feel satisfies a number of key real-return criteria, and enjoys downside mitigation factors not available to investors elsewhere” advised Kelly.
“We’re granular and patient about our assessment of opportunities, but we’re deliberate when we highlight a target and this won’t be our last” Kelly concluded.
The sale by HTL Property, follows its recent market update where it advised the sale of 18 hotel assets since February 2020, with the transaction now representing the 21st first sale for the boutique brokerage firm this year.
HTL Property agents Dan Dragicevich, Andrew Jolliffe and Sam Handy were exclusively appointed to steer the successful sale process.
“Hard yielding, high barriers to entry property driven assets are attractive to investors and transcend asset class appetite. Consequently, they also provide investors with welcomed ROE respite from what are increasingly financially languishing alternatives” added HTL Property National Pubs Director, Dan Dragicevich.
The North Nowra Tavern is a large format coastal freehold strategically positioned next door to the North Nowra Shopping Centre, and within an exclusive trade catchment of 5,976* residents. The business generates in excess of ~$7.50 million in annual revenues across bar, bistro, gaming, wagering and retail liquor. The hotel features a 1:30am liquor licence with 25 gaming entitlements and was ranked #412 for the Dec-2019 quarter. There exists a DA approval in place to significantly increase the size of the trading footprint and optimise the layout of the hotel.
Additionally, the North Nowra Tavern is situated on an underutilised 6,019* sqm landholding with the sites zoning allowing for significant redevelopment potential and a broad range of permissible uses including neighbourhood shopping centres, medical centres and motel accommodation.
“Key Coastal and Regional centres along Australia’s East Coast have been heavily investigated and consequently actioned by numerous leading hospitality investors over the past 12 months; this being our thirteenth Coastal freehold sale in the last 12 months” advised HTL Property’s Managing Director, Andrew Jolliffe.
Other recent large format coastal pub transactions concluded by HTL Property include the Kincumber Hotel ($14.5M), the Kent Hotel Newcastle ($24.5M), Elanora Hotel Gosford ($23.5M) and the Edgeworth Tavern ($10.3M).
“The reality however, is that very few opportunities present the scale and future proofed revenue generation levers that the North Nowra Hotel does, and it is for this reason HTL’s buyer universe reacted so positively towards the opportunity” added Jolliffe.
The sale of the North Nowra Hotel comes as both the New South Wales and Federal Government invests a combined $2.4 billion in order to duplicate and upgrade the Princes Highway between Nowra and the Victorian border. This follows the recent completion of the Albion Park Rail bypass ($631 million) and the Berry to Bomaderry upgrade ($450 million) which has dramatically reduced traffic congestion and improved accessibility to the South Coast.
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