Pub sales pass $100m as lockdown lifts in NSW amid expectations that valuations will soar

Two NSW pubs have changed hands in separate deals worth more than $100m amid expectations that values will again surge.

Sydney's Vineyard Hotel has sold for about $70m.

The reopening of bars across NSW has been matched by a flood of capital chasing city and country pubs with expectations that the market will only get hotter as more than $100m worth of property changes hands.

In the largest deal of the year, the sprawling Vineyard Hotel on Sydney’s outskirts has just sold for about $70m in one of the biggest reopening trades seen as the lifting of restrictions.

The record breaking sale of the pub, 51km from the Sydney CBD, was about $10m ahead of expectations as buyers are fuelled by a cocktail of cheap debt and an expected surge in custom.

Pubs are emerging as big winners from the crisis as both wealthy families — one of whom has picked up the pub from the Stanford family after more than 40 years’ ownership — expand their ownership and institutions also get into the area.

After a tough period during lockdowns revenues are expected to lift over the next few years as spending is redirected towards local entertainment as international travel makes a slow reopening and in states that have not been locked down revenues are already up.

The Vineyard Hotel sale was also bolstered as it is positioned on nearly 77,000sq m of land that is ripe for development in Sydney’s northwest. The property has 57 motel rooms and approval for 84 motel units to be developed.

The property is also benefiting from the being close to about 30,000 new homes planned in the Gables, Box Hill and Hills of Carmel major housing estate developments.

Marketing agent HTL Property managing director Andrew Jolliffe said the pub appealed to operators and groups that are aggregating hotels and want to build scale.

He has predicted that the pub market is in for another big value jump with the once small scale industry now touted as an institutional grade class where players like MA Financial Group jostle with the likes of the Laundy family and Justin Hemmes’ Merivale operation for position.

Big sales have been flowing since before the crisis, when MA Financial picked up the The Beach Hotel in Byron Bay for $104m, and big deals have kept flowing with two Melbourne businessmen recently snapping up the Great Northern, also in Byron Bay and the adjacent 51 room Lateen Lane Hotel, for about $80m.

Bar tsar Mr Hemmes has been on a regional buying spree including two venues in NSW town of Narooma, and Victoria‘s Lorne Hotel and the former Cheeky Monkey’s bar in Byron Bay.

The Vineyard Hotel sold just a day after the expression of interest campaign closed with Mr Jolliffe handling the sale with colleagues Dan Dragicevich and Sam Handy.

The price was a record sale nationally for 2021 and the purchaser owns multiple large format hotels throughout Sydney and in Newcastle.

“As a family we‘re encouraged by the management and outcome of the sale process, and the fact the purchaser enjoys a highly regarded track record in delivering first class hospitality experiences to its clientele,” vendor Glen Stanford said.

“It is comforting to our family to know the property will continue to play a central role in servicing the area and its close knit albeit rapidly expanding community.”

The Stanford family is now readying to sell the second of their hotels and will now offer up the Carousel Inn in Sydney’s Rooty Hill.

Even more deals are in train in regional areas as pubs across NSW get the green light to reopen on Monday in the wake of Covid enforced closures.

On the NSW Central Coast, a specialist fund manager, Harvest Hotels, swooped on The Woy Woy Hotel, buying it for $32m from the McIntyre family.

The sale was brokered by JLL’s Ben McDonald, who said more regional pubs would soon change hands.

The Woy Woy Hotel is one of the most sought-after hotels in the region due to its large trading footprint, town centre location, 30 gaming machines and accommodation.

The McIntyre family had owned and operated the ‘Old Woy Woy Pub’ since the late 1990s. JLL’s Mr McDonald said there was a “seemingly insatiable market” for country pubs.

Originally published as Pub sales pass $100m as lockdown lifts in NSW amid expectations that valuations will soar