Owners of Sydney’s Crocodile Farm bet on frothy pub market

The Ashfield property is the latest hotel on the block as the national boom rolls on.

The Crocodile Farm Hotel in Ashfield is on the market for the first time in its history.

The owners of Sydney’s Crocodile Farm Hotel have become the latest owners to cash in on the pub boom and have put the landmark pub in the city’s inner west suburb of Ashfield on the block.

The hotel is in the area’s “Little Shanghai” district and it is poised to benefit from nearby high rise developments and the recession-proof drawcard of gaming.

The property’s trustees have tapped JLL Hotels & Hospitality and HTL Property to handle the sale of the Ashfield pub for the first time in its history.

The coveted asset is expected to draw significant interest from still acquisitive pub investors, led by some of the most prominent hoteliers in the country.

The Crocodile Farm Hotel sits in the heart of the Ashfield high street retail precinct at the main entrance to Ashfield Mall Shopping Centre. The Little Shanghai area includes Asian restaurants, grocers and retail shops fronting Canterbury Road.

“Robust assets with long histories of profit generation such as this one are as rare as they are keenly sought; and the hotel’s proximity to multiple patronage generators provides confidence regarding sustainable footfall,” HTL Property managing director, Andrew Jolliffe, said.

The hotel carries lucrative 24-hour trading approvals for its 30 gaming machines, with the property also sporting bars and a restaurant. The property is a mixed-use zoned site with a 23m building height limit, which may bring in developers.

The hotel is in NSW’s Top 100 ranked gaming businesses and offers the scope to reconfigure and improve its gaming and wagering offering.

The offer comes in the wake of a recent spate of pub trades in Sydney, including the Longueville Hotel for about $50m, Bar Broadway for $36m and the Earlwood Hotel for $46m.

“Capital application to the hotel asset class shows no signs of abatement with demand continuing to outstrip asset supply from a range of equity profiles, amid a trajectory of rapid industry consolidation,” JLL Hotels managing director, John Musca, said.

There have been more than $2bn of pub sales over the last 12 months with tight yields holding at a time when other property asset classes are being hit by falling values.

The pub boom has been a national affair and other markets are also busy. The freehold of the Crown Inn, in the Adelaide suburb of Old Reynella, has also hit the sales block.

The property is being offered for sale by JLL and it comes with a long-term lease to the largest hotel operator ALH Group, which is part of the listed Endeavour Group, which runs more than 350 venues across the country.

It is on a 6550sq m site in the heart of Old Reynella’s retail centre and the pub operator is on 10-year initial term, followed by four further 10-year options.

JLL’s Will Connolly expects the pub to receive a flurry of interest given the spike in transactional activity nationally in the retail and hospitality investment market. “There is a level of momentum that is palpable within this profile of investment class that has remained consistent over the past 18 months,” he said.

Originally published as Owners of Sydney’s Crocodile Farm bet on frothy pub market