Vic pubs hitting the market amid ‘cost of doing business crisis’
Several of these beloved pubs across Melbourne and regional Victoria have hit the market. Here’s why.
There’s a long menu of Victorian pubs waiting for new owners across the city to the country.
From Brunswick East to Beechworth, people dreaming of giving up their office job to enjoy life behind the bar have plenty of properties to pick from, usually coming with six to seven figure price tags.
Experts warn that the increasing cost of doing business is driving more publicans and owners to call time.
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But there’s still opportunities for savvy operators to flourish in the hospitality industry.
Pubs awaiting new owners include Geelong West’s Telegraph Hotel where the freehold and leasehold is expected to sell from $4m to $5m as the owners retire, listed by Vince Carbone Property’s Joseph Carbone.
Those seeking a regional pub can head to Beechworth where both the 1860s-era Hibernian Hotel and the circa-1870s Empire Hotel’s freeholds are available.
Asking prices for the hotels are $2.9m and $1m plus GST respectively, with CRE Brokers’ Rod Devlin handling both campaigns.
In Melbourne, the Quarry Hotel’s leasehold is up for grabs in Brunswick East for $300,000, while Port Melbourne’s The Cornerstone Hotel’s leasehold has a $125,000 price tag.
CRE business broker Lloyd Nunn, who is overseeing both listings, said in general, pub owners and operators were facing many pressures amid what he described as a “cost of doing business crisis”.
Recently, the businesses behind Bourke St’s The Carlton Club, Richmond’s The Kingston and the Windsor Castle near Chapel St were put in voluntary administration.
Mr Nunn said increasing overheads for pub owners included land tax, alcohol, food, liquor licensing and footpath trading permits, which could be priced at $5000 to $10,000 per spot.
Public liability and building insurance was also going through the roof in some cases by tens of thousands of dollars a year, he said.
But Mr Nunn said as more hotels closed, it meant less competition for punters with many publicans “absolutely killing it” in the outer suburbs.
“If it’s a good pub … and you’re a partner on a passive investment income, your rate of return is outstanding,” he said.
Other Melbourne pubs for sale at the moment include The Fox Hotel in Collingwood and the Limerick Arms Hotel in South Melbourne.
Woodards’ Andrew Guarino said The Fox, which is leased to operators running the pub, also included two adjoining homes.
Price expectations for the entire property are $5m-$5.5m, but a buyer who was simply interested in the pub could acquire it for about $3.5m.
Industry insiders indicated the Limerick Arms, leased to a longstanding tenant until 2039, is expected to fetch a seven-figure sum with expressions of interest set to close next week.
JLL’s senior vice president Will Connolly declined to comment on the asking range for the Limerick Arms, but said that interest had mostly come from Melbourne-based investors.
At Rochester, about 180km north of Melbourne, the circa-1870s pub The Tavern’s freehold and leasehold is for sale with a $1.1m-$1.2m asking range.
Extensively renovated about 20 years ago, the hotel was touched by the 2022 floods but not to a great extent, listing agent Luke Ryan said.
Mr Ryan said country pubs often came up for sale when their owner retired or wanted to try something different.
Running a rural pub typically involved long hours but could make for an enjoyable social lifestyle, he said.
“You’re meeting new people all the time – if you’re a people person, it’s a great job,” Mr Ryan said.
The Tavern, which has four guest rooms and a self-contained unit, could also serve as a shopfront or office downstairs while the owner lived upstairs, he said.
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Originally published as Vic pubs hitting the market amid ‘cost of doing business crisis’
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