Brisbane’s Royal Exchange on block as ALE Property makes $22m pubs sale

Brisbane’s famed Royal Exchange Hotel in the river suburb of Toowong is hitting the block.

The lease on Brisbane’s Royal Exchange ­runs until 2068 and Endeavour, which recently spun out of Woolworths, has flagged that it will expand. Picture: Josh Woning

Brisbane’s famed Royal Exchange Hotel in the river suburb of Toowong is hitting the block with investors tipped to chase the asset that holds a long lease to newly listed entity the Endeavour Group.

The move is part of a play by the listed ALE Property Group, which is also selling the Tudor Inn in Victoria, with the properties held on its books for $22.5m.

The lease on the Brisbane ­watering hole runs until 2068 and Endeavour, which recently spun out of Woolworths, has flagged that it will expand, although is not likely to chase the freehold.

The Brisbane pub is set across 2453sq m of commercial property, and Endeavour operates three retail bottle shop outlets.

Specialist national agencies Burgess Rawson and HTL Property will auction the property on August 4.

“The Royal Exchange Hotel is a highly regarded suburban hotel operation and the stability offered by having the nation’s largest hoteliers as its listed tenants is a compelling proposition,” HTL Property director Glenn Price said.

The national pub market has set a record $1.5bn in sales this ­financial year and such a high-quality covenant is rare.

But when they have come up, like the sale of Pelican Waters Hotel, Edinburgh Castle Hotel, Kedron Park Hotel and The Noosa Reef Hotel, the yields have been tight.