PUBLIC founders Jon Adgemis and Peter Crinis set to buy up more
Jon Adgemis and Peter Crinis have cut a swath through the pub market with PUBLIC now holding about $600m in assets, and the pair are not done buying yet.
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The entrepreneurial Jon Adgemis has cut a swath through the pub market and taken on much larger operators as he builds an empire which could one day hit the share market.
But the former KPMG moneymaker is approaching his latest and biggest foray combining property and hospitality with a trademark eye for detail that he hopes will give him an edge.
The baron was quick to change over even the chairs at one of his latest venues in a sign of his hands-on approach.
“I’m a bit of a stickler around the finer details,” he says.
This focus on even the smallest things is just one quality that could seal Adgemis’ position as the latest pub baron in a city heavy on hospitality royalty.
His Public Hospitality Group (PHG), which is still being bulked out, is shying away from the traditional reliance on pokies which has limited some rival operators.
A key piece of his plan is combining an already extensive property portfolio with building up venues that earn return visitors.
The vision, shared with longtime friend and now business partner, former Crown heavyweight Peter Crinis, is to create a different kind of empire.
His strategy is simple, yet often underused. PHG will make use of an entire hotel and commercial building, rather than just relying on one income stream.
It can reap more from properties by building up drinking and dining options, adding boutique accommodation and opening rooftops.
“Most people don’t use levels two and three, they use them for storage,” Mr Adgemis says. “It gives us multiple revenue streams from a wonderful asset.”
Putting his pubs at the centre of its suburb is central to his push, gaming is not, with Adgemis emphasising VIP lounges and gaming were “not our long term business strategy”.
Adgemis now has seven pubs open, with another half dozen under construction and up to three more properties mooted for fit-outs or refurbishment.
The recent refurb of the PHG’s Oxford House in Paddington – delivered without planning delays – shows what can be done. Rooms at the hotel are nearly fully booked and plans under way to fit out the corner pub.
An outdoor dining area by the upstairs pool was heaving in the middle of a Thursday, with plenty of Paddington types and travellers enjoying the venue. Across Sydney Adgemis’ mid-pandemic play is starting to pay dividends.
A quick turnaround from a purchase to making profits is key to financing the business’ next play. “We like the idea of getting things to cash,” he says.
Refinancing the pubs is key to unlocking the almost $600m in assets now under the PHG banner. It launched a convertible note raising earlier this year, seeking to raise around $40m and touting plans to list the business, although the offer was scaled back to $12.5m.
Adgemis says only a portion of the raising was needed, with lenders CBA and Macquarie lining up to write loans as value of existing properties jumped.
But the IPO is not off the table, with Adgemis saying he was still keen on listing if market conditions were receptive.
“I wish we were doing this interview in a couple of weeks,” Mr Adgemis says, with the businessman’s mind fixed on his plans for Noah’s Backpackers in Bondi, which the company will soon for settle close to $70m.
Noah’s, at the tail end of Sydney’s Bondi Beach, is set to further bulk out his network. But the pivot from property buyer to pub operator wasn’t always on the cards for a businessman who catches the spotlight despite his disavowals of publicity.
Indeed, Mr Adgemis drew local political ire when he bought the 136-year-old Town Hall Hotel in Balmain and closed it. “I made a mistake in Balmain to convert it into a gym,” he admits.
But he’s changed his mind, with plans to reopen the Town Hall Hotel in mid-to-late 2023 around an Italian diner.
“There’s something more about these assets, the community wants to go there” he says.
Things have changed a lot since Mr Adgemis first bought a pub 15 years ago, with valuations soaring during the pandemic and more players taking a run at the market.
Running pubs was not core to his previous strategy. “I was just leasing it out to operators, or converting it over to offices and things like that. I wasn’t operating until Pete came on board,” he says
Mr Crinis says he agreed to “go on this journey” with Mr Adgemis two years ago but served out notice at Crown. He is keeping a lid on its trajectory. “We don’t want Public to be this behemoth,” he says.
The PHG team is, however, still growing.
The Surry Hills-based venture has signed a team of internal designers, project managers, hospitality and accommodation staff to aid its growth.
At a time when all businesses are crying out for staff, Mr Crinis said it’s pleasing to see friends of current staff putting in their CVs to come work for them.
PHG is not yet done with buying, with the pair visiting a potential purchase in recent days and in active discussion with his financial backers, including businessman Alex Waislitz, who put $7m into the business via his Thorney Investment Group
The group looked at some of former Citi banker Damian Kelly’s Pub Invest Group assets, including the flagship Crown Hotel in Sydney’s Surry Hills. That portfolio was split, yielding $127m, and prices are still running hot prices in the pub market.
All eyes are now on The Oaks in Sydney’s Neutral Bay, with JLL Hotels and Hospitality Group asking for $175m. The Laundy family and Justin Hemmes’ Merivale are both understood to have looked at the North Shore flagship but a sale is yet to be finalised.
Mr Adgemis was tight lipped, like other publicans, noting only the asking price was already quite high.
Like his competitors at Merivale, Mr Adgemis is now looking beyond Sydney, recently snapping up the Beach House in East Ballina last year in a $7m deal.
The high flying corporate adviser now appears to have more than a taste for running pubs.
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