Gallagher Hotel Management has expanded its hotel portfolio with the purchase of the Terrigal Hotel for $28 million.
It is said to be the largest single NSW pub transaction on record outside of Sydney, and the sale advisors, JLL hotels & hospitality group, said the hotel was the last owned by formerly ASX-listed horse-breeding company Newhaven Stud Pty Ltd.
Gallagher Hotel Management has purchased the Terrigal Hotel for $28 million. Photo: supplied
According to John Musca, national director of JLL, the high cost of pubs in capital cities is seeing a focus back onto coastal pubs. He added that operators were taking advantage of the shift in population as people look for a “sea or tree change” lifestyle.
The pub sector has been one of the busiest in the market with close to $800 million worth of assets changing hands across the Sydney metropolitan area and the coastal regions in the past year.
Big-name food and beverage operators, including Matt Moran and Bruce Solomon’s Solotel, have been some of the more active buyers.
Mr Musca said the Terrigal hotel has been in the same ownership for over 25 years.
“With Terrigal, Newhaven has sold down over $70 million of hotels in their portfolio exit including the Buena Vista Hotel Mosman, Duke of Gloucester Hotel, Randwick and the Bateau Bay Hotel, which we transacted,” Mr Musca said.
“The Terrigal Hotel is yet another great generational landmark hotel and like Hotel Bondi, the Coogee Beach Pavilion and the Golden Sheaf Hotel we are delighted to have facilitated this off-market sale, as this special calibre of hotel that do not change hands very often.”
The Terrigal hotel commanded a large price as it occupies a 3540 square metre site area and includes 26 gaming machine entitlements, late licence trading approval, an expansive beer garden and outdoor terraces and two adjacent shops with manager’s apartment.
It also has a recently approved development approval for extensive renovation works.
The purchase by Gallagher Hotel Management brings their hotel portfolio to 11 with Terrigal representing their first foray outside of the Sydney Metro area.
The group is one of the most respected and fastest-growing hotel groups in the country and have been awarded the AHA Hotel Operators of the year, along with Patrick Gallagher himself being inducted into the AHA hall of fame in 2016.
Mr Musca said the hotel follows the recent sale of other coastal hotels including the Shoal Bay Hotel for about $18 million, and also comes at a time when Melbourne-based owners of the Beach Hotel & Resort in Byron Bay have launched their second attempt to sell the freehold interest in this 4-star resort and pub.
The asset has been listed, with price expectations of $75 million-plus. It was developed by Paul Hogan and John Cornell from the proceeds of their film Crocodile Dundee.
If successful, the price will represent a 4.2 per cent yield on the resort, which is leased John Van Haandel, the long-term operator of Melbourne’s Prince Hotel in St Kilda.
The sale of the Country Club Hotel in the NSW tourist hot spot of Shoal Bay was through CBRE Hotels national director Daniel Dragicevich and manager Ben McDonald. It was sold to hotelier Andrew Lazarus, who purchased Newcastle’s Exchange Hotel in mid 2016.
Other recent deals have seen the Laundy family acquire the large-format Swansea Hotel in Lake Macquarie for $13 million from the Bernie family.
The pub was marketed by CBRE Hotels, which reports nearly $50 million worth of NSW regional and coastal assets so far this year.
“The Swansea Hotel is truly an A-grade NSW coastal asset, with the price quantum and yield being testament to its quality,” said CBRE national director Dan Dragicevich.