The 'Beachie' of Byron Bay: the story behind Australia's $100 million pub

John 'Strop' Cornell clearly has an eye for property.

In 1990, the filmmaker, businessman and long-time manager of comedian Paul Hogan acquired a run down pub directly opposite Byron Bay's main beach for about $9 million. The same pub was sold two weeks ago for a record $100 million.

The Beach Hotel fronts more than 100 metres of Byron’s Main Beach.

The sale – a record price for a pub in Australia – was the culmination of a three-decade transformation of what was once a low-key watering hole for surfers into a legitimate international tourist attraction. But the lofty price tag has already triggered speculation about what the iconic pub's new owners may do to generate financial returns on their investment.

Byron Bay Shire Councillor Michael Lyon says the only concern for local residents is that they "don't want to see any poker machines" returning to the pub. The pub's previous owners, an investment fund backed by the Melbourne based Liberman family, removed the machines in 2017.

"One of the first things the previous owners did when they bought it about it two years ago, was to remove the [poker] machines. And the comments around town after the latest sale was that we don"t want them coming back," Cr Lyon told The Sydney Morning Herald and The Age.

Dan Brady, the chief executive of Moelis Australia Hotel management, is quick to confirm that won't happen. A major redevelopment of the site by adding new floors is also not on the cards.

"Community research to date indicates that gaming is not a preferred form entertainment that interests the local community and as long as community sentiment is like that, we won’t put pokies in," he says.

"Redeveloping the pub by adding on new floors is not in our plans. We think the highest and best use [of the hotel] is as a community pub and that’s our speciality. We will keep focused on that."

Colourful history

The Beach Hotel, affectionately known to locals as the "Beachie", has an ownership history almost as colourful as the site it sits on.

After the 1990 acquisition, Cornell – who was also the driving force behind the creation of World Series Cricket with the late media mogul Kerry Packer – spent years developing the pub. He then sold it in 2007 to the Melbourne-based racing-car driver Max Trigg for about $44 million.

Mr Trigg installed the local van Haandel family as the operator of the business, who built it up into a "must visit" location with live bands, improved food and increased open-air space.

Over the years, Mr Trigg also opened an adjoining resort-style boutique hotel to boost revenue. It now sits on more than 100 metres of prime land with enviable beachfront views.

In 2017 he sold the land with the pub to Impact Investment Group (IIG), backed by the Lieberman family for what was then a record $70 million.

Looking to refurbish. Credit: Danielle Smith

IIG immediately ripped out the poker machines and worked with the van Haandel family to further improve the site. It was around this the time the once-laid back Northern NSW seaside town started to catch on with the Hollywood set, with stars such as Chris Hemsworth, Matt Damon and Margot Robbie moving in and putting it firmly on the international tourist map.

After only two years and a number of unsolicited offers, IIG sold the pub to the investment house Moelis Australia for $100 million.

The sale price smashed this year's other big deal: when the John Singleton and Arthur Laundy-owned syndicate snared $65 million for The Steyne in Manly on Sydney's Northern Beaches in May. It was bought by the Iris Capital group.

Moelis Australia will put the pub into a new, unlisted investment hotel fund. It will be run by Mr Brady who is also the head of the listed Redcape Hotel Fund, which is also part of the Moelis business.

"The Beach Hotel Byron has been an iconic Australian pub for over two decades, located in a vibrant, cosmopolitan country town that enjoys a booming local economy thanks to its year-round tourism averaging 14,000 largely domestic visitors per day and growing residential population," Mr Brady said.

He said that as a result of the past when it had a separate owner and operator, the pub was under-invested.

"But now having common ownership of the real estate and operating business for the first time since 2007, it will enable the required investment to deliver a venue that is more commensurate with local community values," Mr Brady said.

"But overall the consensus is positive on the sale. The Beachie is an iconic tourist pub and is a focal part of the Byron township."

JLL hotels and hospitality group's John Musca, Tom Gibson and Tom Gleeson who advised on the sale said there was a "broad profile of bidders and robust committed offers" for the pub and its land, the luxury hotel and business operations.

"This was the first time in decades that a buyer had the chance to secure both the hotel business, and this iconic property in a stunning location," Mr Musca said.

"Moelis ran extensive independent focus group research with Byron residents and visitors. Clear feedback validated Moelis’ vision for the pub, which centres around aligning the Beach Hotel to the local community values of openness, fun and artistic expression, whilst preserving the unique Byron Bay vibe and classic Australian pub culture."

Having operated the hotel since 2007, and as long-time Byron Bay residents John and Lisa van Haandel are keen to pass the legacy onto a worthy and capitalised new owner.

"It’s really important to Lisa and I that the incoming party respects the township’s needs and invests in the property and the many exciting new business initiatives and ideas that are available," Mr van Haandel said.