28 Feb 2020

Singo cops rare loss on Brisbane pub sale

John Singleton’s Australian Pub Fund has copped a rare loss on a pub divestment after selling The Elephant Hotel in Brisbane’s Fortitude Valley for a little more than $20 million to Sydney operators Simon Tilley and Nick Wills.

The historic four-level venue at 230 Wickham Street last changed hands for about $27 million in mid-2013. Both sales were as freehold going concerns.

It was the last remaining Queensland freehold asset owned by the Australian Pub Fund, which Mr Singleton established in 2010 with his mates Geoff Dixon and Mark Carnegie.

In a soaring pub real estate market, declines in value are rare, especially for large metropolitan venues.

It is understood the lower price paid by Tilley and Wills Hotels was due to a decline in the pub’s trading income.

The Riversdale-operated Australian Pub Fund had a better outcome with its last Sydney asset, the Unity Hall Hotel in Balmain, which it sold for $20 million in November, double what it was purchased for in 2011.

The fund has been selling down assets since abandoning a $250 million to $300 million float in 2014.

The platform’s second pub fund, backed by new investors, acquired the Lambton Park Hotel in Newcastle. It also still has the leasehold for the Stock Exchange Hotel in Brisbane and manages three other Queensland venues.

The Elephant was put up for sale in October last year. A well-known live entertainment venue, it offers four separate bars, a large outdoor beer garden and a gaming room with 42 machines.

The acquisition by Tilley and Wills Hotels marks the group’s entrance into Queensland. It currently operates five venues in Sydney including the Greenwood Hotel in North Sydney, the Clovelly Hotel in the Eastern Suburbs and Verandah Bar in the CBD.

The sale of The Elephant Hotel was handled by CBRE’s Paul Fraser and Jack Morrison in conjunction with JLL’s Tom Gleeson.

Mr Fraser said the campaign generated eight offers, highlighting the appetite for large-format freehold going-concern hotels with diversification of income streams and obvious operational upside opportunities.

Mr Gleeson said the incoming operators, Tilley and Wills Hotels, had an enviable track record of successfully re-inventing venues and “are excited to bring their distinct style to the icon that is the Elephant Hotel and capitalise on the long-term prosperity of the Fortitude Valley Precinct”.

SOURCE : https://www.commercialrealestate.com.au/news/singo-cops-rare-loss-on-brisbane-pub-sale-930448/

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