Hotel transactions on tap
THE past year has been one of the busiest for the pub sector, with close to $1 billion worth changing ownership through an array of structures and investors.
A year ago, the main vendors were the receivers and managers that had been brought in to rescue failed investors. But the corporatisation of the sector through the Laundy family's $500 million joint venture deal with Woolworths subsidiary Australian Leisure and Hospitality Group and the entry of private equity via the Redcape Property Fund has pushed the sector to the fore.
Third-generation hotelier Stuart Laundy, who turns 40 this weekend, said the sector had gone to hell and back. He said the problems started when investors moved into the sector, paid too much and then tried to sell out to recoup lost cash.
''The pub game is and always will be magnificent and for my friends who run hotels, they are on a winner,'' Mr Laundy said. ''But with all the corporatisation of the sector, I am concerned these private equity funds are going to flood the market in the next three to five years - the usual length of investment for private equity funds - and then who is going to buy these assets on the yields they want?
''I have learnt the pub sector from my dad and grandfather and, despite all the changes, the top 10 pubs in NSW remain owned by families or people that know the pub game.''
Mr Laundy added that the deal with Woolworths would give his family the chance to add to its iconic stable. This includes the recent purchase of the Watsons Bay with Fraser Short, which will complement the family's holdings in Manly.
Jones Lang LaSalle Hotels said it had sold 49 hotel assets across NSW in 2012 to date and was expecting several more in the next five weeks.
This is added to sales from CBRE's Joel Fisher, Andrew Jolliffe at Ray White Hotels, Mike Wheatley at Knight Frank and Adam Spencer-Carr at Spencer-Carr Property.
The interest of the national director of Jones Lang LaSalle Hotels, John Musca, in gaming pubs is reigniting, as astute hotel operators continue to seek underperforming or optimised hotels with late licences, large trading footprints and strategic locations.
''Some of Jones Lang LaSalle Hotels' sales over the last few weeks include the Guildford Hotel for $16.2 million; the Macquarie Hotel, recently renamed the Sydney Brewhouse, for $8.5 million; the Lucky Australian Hotel for $4.1 million; and PJ Gallagher's Drummoyne for $20 million,'' Mr Musca said.
''The recent sale of the Greenfield Tavern for $28 million is also testament to the renewed pursuit of gaming share by the stronger stakeholder balance sheets.''
Mr Musca said he saw a transactional trend emerging, whereby larger groups were seeking to rationalise underperforming or non-core businesses to releasing equity to take advantage of a slowly turning market and current interest rates, providing opportunities to acquire larger gaming pub assets.
The pub investments sales manager at Jones Lang LaSalle Hotels, Sam Handy, said a new breed of operators were targeting underperforming venues in high-profile locations and integrating restaurant and small-bar concepts into pub formats to capitalise on the longer trading hours and larger capacities.
''These savvy operators are highly skilled in repositioning their brands, markedly lifting on-premise volumes,'' Mr Handy said.