The Waterworks Hotel in Botany has been sold to private interests for circa $17.3 million in the latest sign of demand for pub investment opportunities.
CBRE Hotels Daniel Dragicevich and Sam Handy negotiated the sale on behalf of the ASX listed Lantern Hotels Group. The hotel last traded to Lantern two years ago for $8.25m and in its announcement to the stock market, Lantern advised that the sale price represented a 65% premium on the 30 June 2016 book value.
The deal closely follows Lantern’s well publicised recent sell down of the Five Dock Hotel ($28.75m), Ambarvale Hotel ($21.2m), Uncle Buck’s Hotel ($25.3M) and Commodore Hotel ($14.5m).
CBRE Hotels National Director Mr Dragicevich said the sale of the Waterworks Hotel had been timed to capitalise on the current market conditions and had given investors a last chance to acquire a trading opportunity in 2016.
Mr Dragicevich added; “The opportunity was keenly contested with the final price reflective of the current under supply of quality freehold gaming pubs and the high level of competition experienced over the course of the campaign.”
The Waterworks Hotel has a 24 hour liquor licence, 26 gaming machines and recently made its debut on OLGR’s highly coveted TOP 200 gaming rankings list. There is an approved DA for a new alfresco gaming room and scope to increase the hotels gaming machine holding to the maximum 30.
The hotel is located on a prominent 902sqm site between Sydney Airport and Port of Sydney. The site offers future redevelopment potential for residential apartments and short term accommodation underpinned by its B2 – local centre zoning, 14m height approval and generous 2:1 FSR.
CBRE Director Sam Handy advised; “We anticipated that there would be intense interest in the hotel and this was the case as evidenced by the fact we achieved an unconditional exchange a week out from the scheduled campaign close.”
This deal continues CBRE Hotels’ strong run of sales in 2016 having sold just under $300 million in pubs across 32 individual transactions in New South Wales alone. Notable transactions have included the Keystone portfolio ($55m), Lidcombe Hotel ($36m), Uncle Buck’s Hotel ($25.3m) and the Ambarvale Hotel ($21.2m).
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