The Republic at Norwood sold as investors pour millions into SA hotel acquisitions and upgrades

The Republic Hotel in Norwood has been sold to a local hotelier as SA pub groups splash out on multimillion-dollar acquisitions and upgrades amid a boom in trade.

Endeavour Group chief executive Steve Donohue.

The state’s largest pub groups and local family hoteliers are splashing out on acquisitions and upgrades of metropolitan and regional venues, buoyed by a surge in trade as customers brush aside cost of living concerns at their local.

Gaming reforms, attractive pricing and the rapid post-Covid recovery has attracted interest from big interstate players, but local groups are also capitalising on the strong conditions by investing in their own offerings.

Matthew Kelly, who runs venues including the The British and The Kentish hotels in North Adelaide, and Hotel Elliot in Port Elliot, has added The Republic Hotel in Norwood to his portfolio, while Hurley Hotel Group is currently investing $100m into a new venue and upgrades across its portfolio.

The British hotel owners Ryan Hughes and Matthew Kelly. Picture: Morgan Sette

ASX-listed Endeavour Group’s ALH Hotels business remains the largest operator of South Australian pubs, recently adding the Tower Hotel in Magill and the Beach Hotel in Seaford to its growing local portfolio.

The company’s chief executive Steve Donohue said the state had been a key growth market for Endeavour Group since its demerger from Woolworths two years ago, with six of the company’s 16 hotel acquisitions during that time located in South Australia, where it now operates more than 30 venues.

“We love South Australia – it’s in many respects the spiritual home of the whole group when you consider the winemaking assets that we’ve got in the Barossa and in McLaren Vale,” he said.

“It’s a great place to do business and we want to do more there, no doubt about it.

“We continue to keep a really close eye on what the opportunities are in the market, and we’re really disciplined about making sure that the hotels that we buy are right for our model, because we have one that is a multifaceted hotel experience – we want to have a great bar experience, bistro experience, gaming experience, accommodation ideally, and importantly for us retail as well.”

Endeavour Group’s ALH Hotels acquired The Tower hotel earlier this year.

Mr Donohue said customers were craving social connections following the events of Covid-19, and pubs had proven a popular place for people to reconnect and socialise, with strong trade being reported across the ALH portfolio.

“To offer a place for social connection that’s local and great value – that’s what the pub offers,” he said.

“We’re serving more pub meals than we ever have before; we struggle to keep up with the demand for pub meals right now.”

After partnering with Ryan Hughes to take over The British last year, Mr Kelly fought off interest from interstate to snap up the Republic Hotel – the latest in a string of venues sold off by hotelier Greg Maitland.

The sale included the property, which comprises 3327sq m of land previously earmarked for a six-storey apartment development.

Local publican Matthew Kelly has acquired The Republic hotel in Norwood. Picture: Supplied by JLL

JLL’s Will Connolly, who brokered the deal, said the level of interest generated by the sale showed there was a strong appetite for South Australian pubs from investors across the border.

“The sale campaign was certainly a ‘full court press’ targeted strategically to both local and national markets,” he said.

“This was evidenced by the fact that offers received by groups at the close of the sale campaign represented parties from a local level as well as both Queensland and Victoria.

“It shows that our eastern state based publicans are still drawn to high quality South Australian opportunities.”

The Hurleys are another local family investing heavily in their venues, with renovations at the Arkaba Hotel and Hotel Royal in Torrensville under way, and a new $35m Panorama Hotel at the former TAFE site on Goodwood Rd currently under construction.

Hurley Hotel Group owner Jenny Hurley said it was one of the group’s biggest ever projects.

“We are thrilled to play a role in building a new community area and look forward to bringing our spirit of community, hospitality and fun to Panorama,” she said.