Formerly home to Molly Blooms, the property has operated as a pub for over a century.
The 39 Bay Street property, located on the corner of Bay Street and Rouse Street, is offered on a WALE of close to seven years and comes with street-side dining and a 3am general (late night) license attached.
The two-story building is fully leased to the Australian Venue Co (AVC), which operates approximately 150 venues across Australia and New Zealand, employing around 4,500 people.
Through the backing of global investment firm KKR, AVC earlier this year acquired the Coles pubs operations in Queensland and South Australia.
The Exchange hotel is being sold with almost seven years to AVC remaining on their current term, providing annuity income, a 6-month bank guarantee and rental growth through to April 2026 with an additional 5x5 year options taking the lease term to 2051 with all options.
“The freeholds of high-quality pubs positioned on main roads are always tightly held because they represent such unique value,” Mr George, CBRE Hotels Melbourne Director commented.
“An opportunity like this with annual growth, a national tenant, bankable security and long WALE (almost seven years) represents investors an exciting alternative to shares or low yielding term deposits – currently hovering between 1.5% - 1.8%.”
“The anticipated yield range of over 5% should attract strong interest from both domestic and international buyers wanting to secure a famous Port Melbourne corner property with a very solid national tenant and the multiple future development options offered by mixed-use zoning,” Mr James, CBRE Melbourne’s Strip Retail Director noted.
“Having sold the vast majority of Bay Street property presented to the market over the last two years, we have seen continued interest in the Port Melbourne retail investment market as capital continues to flow into the commercial sector from alternative investments given stable market conditions.”
The Exchange Hotel will be sold by public onsite auction on Friday 29 November at 1:00pm (aedt).
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