Arthur Laundy’s $42m show of faith in pubs market

Pub mogul Arthur Laundy has bought The Oxford Hotel in Sydney’s Drummoyne for $42m.

Arthur and Craig Laundy find refreshment at the family-owned Marsden Brewhouse in Marsden Park, in Sydney’s west. Picture: Tim Hunter

Pub mogul Arthur Laundy’s purchase of an entire city block in Sydney’s suburban Drummoyne, with the centrepiece a popular hotel, proves the hotel market is firing but agents predict the second half of the year will bring even more transactions.

Four major pubs have sold this year in NSW alone including The Steyne at Manly for $62.5 million, The Cambridge at Fairfield for $55m and the Lidcombe Hotel, picked up by the low-profile pub-owning Walker family for $54m.

Mr Laundy has just paid nearly $42m for the popular The Oxford Hotel in Drummoyne replete with 30 pokies, adding to a swag of adjoining retail shops he already owned.

In a major land-banking exercise he paid a further $3m for a bank, giving him control of an entire block with three frontages, but he is yet to decide his plans.

The father of former federal Liberal MP Craig Laundy said Sydney’s pub market remained robust. “The pub market is very strong, I can’t see any deterioration. I think hotels are overvalued but I have been saying that for five years,” said Mr Laundy, who now owns 69 hotels in NSW and Queensland.

HTL selling agent Andrew Jolliffe said Mr Laundy’s purchase of The Oxford, on the market for only two weeks, showed a confidence in the marketplace for someone who on any measure was regarded as a paragon of the industry.

“Mr Laundy’s views are highly regarded and therefore it’s an irrefutable vote of confidence in the strength of the sector,” said Mr Jolliffe, adding that few people had as much history and financial exposure to the industry as the Laundy family. “This latest purchase by Arthur would appear to be vindication that now is a fertile time to buy.”

He conceded there was a lack of super A-grade hotels for sale at present but expected the second half of the year to pick up.

“Historically, twice the number of pubs transact in the second half as the first half,” he said.

In Perth, one of the city’s landmark pubs, The Subiaco Hotel, has just hit the market for the first time in more than a century.

The classic heritage pub, constructed in 1897, is on a prominent 2060sq m site and is being sold by JLL director of sales and investments Sean Flynn. Mr Flynn would not discuss the expected sale price for The Subi, but sources predicted it would sell for significantly more than $10m. The property at 455-465 Hay Street was renovated in 2014, with $6.5m spent on it, and is controlled by a large syndicate.