Tudor pub sets record price as deals hit $140m in a fortnight

“The sales activity in Redfern in recent times has been remarkable, underscoring the hospitality renaissance of the precinct,” HTL Property national director Dan Dragicevich said.

Dragicevich and HTL Property have also sold Redfern’s Woolpack Hotel to the Laundy family, and the Grosvenor Hotel to Ashton Waugh’s Watering Hole Hotels group.

Other deals in the past two weeks include the Tahmoor Inn Hotel in Sydney’s south-west, which was sold by the Murray and Ryan families to a private syndicate for $40 million.

Kuleto’s in Newtown went for $8 million – a deal HTL Property’s Sam Handy and Blake Edwards negotiated on behalf of long-time owner Donna Asensio, who is retiring after having run the bar for 42 years.

The hotel has been acquired by a new consortium with plans of introducing an edgier food and beverage offering that will better resonate with the Inner West community and demographic.

Fraser Short’s Sydney Collective has sold Windsor’s Fitzroy Hotel to the growing Don Hodge Group for $8 million, after owning the well-known pub for only a year.

HTL Property managing director, Andrew Jolliffe said the strength of the pub market in 2022 has been immense, and record sales such as the Tudor “confirm the appetite from investors and pub operators seeking greater exposure to the pub market”.

Despite lockdowns, rising costs of supplies and interest rates, the pub sector has been the busiest of the commercial real estate sectors during the past two years. The deals have amounted to about $4 billion, with long-time intergenerational families deciding to sell to new and existing operators and investors.

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Ray White head of research Vanessa Rader said sales to the end of October for NSW have now eclipsed the full 2021 calendar year.

“While the buyer pool may have contracted, this year has recorded the largest sale on record, being Casula Crossroads changing hands for $150 million,” Rader said.

“Looking at the 12 months to date, we can see there has been a swing back to metropolitan assets represented by over $1 billion or 54.2 per cent of the $1.86 billion changing hands, while coastal assets accounted for 27.1 per cent of all sales.”

Rader said during the past 18 months the pub market has set new benchmarks in turnover and value after a difficult COVID-19 period marked by closures and trade restrictions.

“In NSW alone, 2021 saw over $1.5 billion in sales bolstered by strong demand in coastal and regional markets together with more traditional metropolitan region,” she said.

“With many generational assets coming to the market, after having to bear the most difficult trading time for many owner operators, we saw new highs achieved as low-interest rates and a growing buyer pool quickly converged on the asset class.”

The move in population to coastal and regional markets during COVID-19 also encouraged many buyer groups to expand their portfolio into these markets.

Rader adds that with lenders supporting pub transactions, both bank and alternative financing sources have aided the large pool of buyers in reducing investment yields.

“As the cost of finance increases, we have seen some correction in yields, however the longer-term prosperity involved with the land value, development potential, and earnings has seen only limited moderation to date,” she said.

The largest deal is the sale of the Oaks Hotel in Neutral Bay on the lower north shore, with price expectations of more than $175 million. JLL is advising on the sales process which is in the second round of bids.