Sydney, 24 September 2014 – Iris Capital will tap into the continued strength of the suburban Sydney pub market with the sale of the recently refurbished Oxford Hotel Drummoyne and an adjoining commercial property.
Dan Dragicevich of CBRE Hotels and JLL’s John Musca have been appointed to steer the tender campaign for the large landmark hotel, formerly known as PJ Gallagher’s, which has just undergone a $3.5 million complete renovation and extension, including a new beer garden.
Iris Capital has recently broadened its focus to include substantial residential and mixed-use developments and is currently undertaking the conversion of the Mercure Hotel in Potts Point to 178 apartments and a retail component.
“It certainly hasn’t been an easy decision to divest the Oxford as we haven’t had the opportunity to benefit from the just-completed 12 month renovation, but the equity will be redirected to the $300 million Mercure project, which is our focus for 2015,” said Iris CEO Sam Arnaout.
Billed as one of the best freehold going concern hotel opportunities of 2014, the Drummonye property occupies a high profile corner site and includes a ground floor bar, gaming room, TAB and beer garden as well as completely renovated first floor bistro, restaurant and function space.
Also included in this offering is the property located adjacent to the hotel at 15-17 Lyons Road which is currently occupied by a freestanding two-level retail/office building.
“The diversified nature of this opportunity affords the incoming purchaser a plethora of future development options as well as significant earnings potential,” CBRE’s Mr Dragicevich said.
A draw card for prospective purchasers will be the property’s affluent catchment area, the concentration of sporting clubs and teams in and around the hotel and high disposable income, combined with the limited number of competing hotel venues.
“Assets of this calibre are extremely tightly held and therefore demand premium pricing,” Mr Dragicevich added.
JLL’s Mr Musca noted; “As virtually a Top 100 gaming hotel with substantial bar and food revenues and a complete renovation about to drive growth, the Oxford is arguably the best hotel opportunity offered all year.”
“The investment fundamentals of the hotel asset class will continue to drive private and public market equity interest when high barriers to entry coupled with a low interest rate environment deliver a return on equity that simply cannot be matched in other forms of property,” Mr Musca said.
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