Sam Arnaout’s Iris Capital has acquired the significant Narwee Hotel from its long term owners the Ryan family, following an off-market process exclusively managed by leading specialist brokerage agency HTL Property.
The sale, the largest nationally for 2020, is a continuum of the theme of established investors acquiring A grade hospitality properties at a time when interest rates subsist at record low levels.
“When we consider the origin of the most recent capital deployment events, it is almost exclusively linked to leading groups such as Redcape, Merivale and Iris Capital” advised HTL Property Managing Director, Andrew Jolliffe.
“This is instructive on a range of levels, however most notable is the fact that some particularly experienced actors within the asset class are the ones who are prosecuting the most definitive acquisition strategies” Jolliffe added.
The Narwee Hotel is a multi-storey asset located upon a large commercial property holding over 3370sqm, and is situated immediately opposite the Narwee Train Station. As such, the eponymous hotel is the focal point for the established Sydney suburb, and has been owned and operated by the highly regarded Ryan family for in excess of 30 years.
“I’m delighted to have purchased the Narwee Hotel from the Ryan family, and recognize the significance of selling a business having owned and operated it since 1987” said successful purchaser and Iris Capital owner, Sam Arnaout.
“The sale process was clinical, and the impressive presentation and positioning of the asset satisfied not only our key investment criteria, but also met a geographical objective we held for that part of Sydney” Arnaout added.
Exclusive agents Andrew Jolliffe, Dan Dragicevich and Sam Handy managed a private tender process with a select target group of prospective purchasers, and advised that interest in the asset was material.
“Our clients engaged us to run a discreet sale process in order to canvass interest from our database of active investors, and the short list comprised parties with both the capacity and intent to make a significant acquisition at a price point commensurate with the hotel’s status and opportunity” added HTL Property’s National Pubs Director, Dan Dragicevich.
“The sale price achieved pays deference to the nature of the opportunity and is justified given the scarcity of large format Top 150 gaming hotels which also enjoy strong food, beverage, accommodation and alternative use value” suggested Dragicevich.
“The previous highest price paid this year was for the Macquarie Tavern we sold on behalf of Monarch Hotels to the De Angelis family for 43m, and whilst it is rewarding to have the top two sales, it is more important for the industry to have rebounded so prominently following the challenges visited upon it this year” concluded Dragicevich.
The sale of the Narwee Hotel continues the national run rate of one hotel being sold per week in 2020, and reinforces the magnetism enjoyed by the asset class even during the economic imposition and uncertainty created by CV-19.
“Transaction volumes are operating nationally at around 70% of those achieved during the same period last year, however the cadence for activity has quickened demonstrably over the past 8 weeks” indicated Jolliffe.
“Portfolios are being realigned just as urgently as they are being reimagined, and it really is a landscape where the fast are outperforming the slow; as distinct from simply the big consuming the small” Jolliffe concluded.
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