Justin Hemmes’ Merivale buys Randwick’s Duke of Gloucester

Billionaire Justin Hemmes has acquired the much-loved Duke of Gloucester Hotel in Randwick.

The Duke of Gloucester Hotel in Randwick.

Billionaire Justin Hemmes has acquired the much-loved the Duke of Gloucester Hotel in Randwick, affectionately known by locals as The DOG.

The pub baron bought the local landmark from prominent Sydney hospitality operator, Good Beer Co for $32m.

The deal by his Merivale empire is the latest transaction in a series of strong recent sales of suburban NSW pubs.

The will be added to Merivale’s roster eastern suburbs pubs including the Royal Hotel Bondi, the Coogee Pavilion and the Centennial Hotel, Woollahra.

The deal was negotiated by JLL’s John Musca and Ben McDonald, and attracted significant interest from rival hoteliers, unlisted investment funds, family offices and wealthy individuals.

Good Beer Company’s John Azar said the DOG had been a “fantastic” hotel to own in great local community, but he said it was passing it to well-respected operators in Merivale.

Merivale said its purchase was a “strong vote of confidence in the future of the pub industry after a devastating year and an optimistic step forward in hospitality’s road to recovery”.

Merivale will receive the keys to The Duke of Gloucester in January and unveil its plans for the venue at that time.

The pub generates about $180,000 in weekly revenue and has 19 pokies. The sale was fiercely contested and exchanged only five days after bid closure.

It comes on the back of ASX-listed Redcape groups announcement last week of their acquisition of the Gladstone Hotel in Dulwich Hill, in a transaction worth $38m.

JLL Hotels’ Ben McDonald said the deal highlighted the strong underlying property fundamentals of Sydney’s eastern suburbs.

“As the NSW economic recovery gathers momentum, we have seen the market for operating real estate assets swell as capital is put to work in search for the stronger yielding opportunities that hotel assets offer,” he said.

JLL’s Mr Musca said the current weight of capital continues to drive transaction demand not seen in over a decade.