The Ambarvale Hotel in south-western Sydney has been sold to private hotel interests for $21.2 million in the latest sign of demand for pub investment opportunities.
CBRE Hotels’ Daniel Dragicevich and Sam Handy and negotiated the sale on behalf of the ASX listed Lantern Hotels Group. In its announcement to the stock market, Lantern advised that the sale price represented a 50.2% premium on the 30 June 2016 book value.
The deal closely follows Lantern’s $25.3 million sale of the Uncle Bucks Hotel in Mount Druitt, which was also transacted by Mr Dragicevich and Mr Handy.
Mr Dragicevich said the two sales had been timed to capitalise on current market conditions and the unprecedented undersupply of quality freehold gaming hotels in Sydney.
“AAA gaming pubs are seldom offered to the market and, as a result, both properties attracted strong interest,” Mr Dragicevich said.
“Prior to these sales, just three genuine Top 200 gaming hotels had transacted over the course of 2016 and there is expected to be very limited availability of pubs in the gaming segment in the foreseeable future.”
The Ambarvale Hotel is strategically positioned on a 7,200sqm site with surplus land and a flexible zoning and benefits from a large catchment area, limited competition and an excellent gaming demographic.
The hotel is proximate to the Greater Macarthur Priority Growth Area, which is expected to deliver up to 33,000 new homes via a staged land release in the surrounding areas of Mount Gilead, Menangle and Appin.
CBRE’s Mr Handy said five sale contracts had been issued, highlighting the buoyancy at the top end of the Sydney hotel market.
“Robust trading conditions, debt liquidity and the current low interest rate environment is driving strong buyer demand, however there has been an undersupply of quality investment opportunities,” Mr Handy said.
“This led to keen interest in the Ambarvale Hotel, particularly from Sydney's top gaming portfolio publicans.”
The Ambarvale transaction follows a flurry of recent activity in the NSW hotel market, with CBRE Hotels having this year negotiated in excess of $250 million worth of NSW pub sales across 30 separate transactions.About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2015 revenue). The company has more than 70,000 employees (excluding affiliates), and serves real estate investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
