15 May 2019

Brisbane tavern owners cop rare loss in hot pub market

A group of investors, headed by former Yellow Brick Road owner David Carr, has copped a rare loss in the hot pub sector, after selling the Redcliffe Tavern and First Choice Liquor Superstore in Brisbane's north for $14.5 million.

The property at 32 Anzac Avenue previously sold for $15 million to Mr Carr's Bonheur Nominees in March 2016.

In sharp contrast, the previous owner, Somerset Properties, made a 30 per cent capital gain on the same property in less than two years, after buying it from Alceon for $11.5 million in August 2014.

In the latest deal, it was acquired in February by Anthony and Julian Vedelago's Wuvulu Property Investments Pty for $14.5 million on a yield of about 7.25 per cent.

Recliffe Tavern adjoins the Woolworths-anchored Bluewater Square shopping centre, which was bought by listed property fund manager Elanor Investors Group for over $55 million in 2017.

The loss-making sale came despite the  1464-square-metre freestanding building (comprising a 643 sq m tavern and 821 sq m liquor store) on a 2313 sq m site being offered with a 20-year lease to Coles-owned Liquorland.

Mr Carr, who runs Sydney wealth advisory firm DBR with Bernard Reilly, (also an investor in the Redcliffe Tavern), played down the sales result and said the investor group had "come out ahead" when the deal was averaged out across a number of pub divestments.

"I don't see it as a turning point for the pub sector," Mr Carr said.

He attributed the weaker sale result to "some uncertainty around the Coles business model in Queensland" during the sales campaign and described the property as more of a retail offering then a pub asset.

The sale was brokered by Savills’ Peter Tyson and Jon Tyson following a campaign which attracted multiple bids.

“Demand for long leased freestanding assets remains strong. The offering attracted interest from over 120 buyer groups," Mr Tyson said.

“Given the price point, purchaser interest stemmed primarily from the private investor fraternity, who were attracted to the long net lease, quality tenant covenant and management simplicity of the asset," he said.

Industry insiders expressed surprise at the loss-making sale, which came at a time when most pub values have surged.

"I honestly can't think of another single asset [outside receiverships] that has been sold in the market over the last five years, which have gone backwards in value," one insider commented.

SOURCE ; https://www.afr.com/real-estate/commercial/brisbane-tavern-owners-cop-rare-loss-in-hot-pub-market-20190508-p51l9p

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