Property boom: North Shore institution The Oaks Hotel to fetch over $175m in private sale
Sydney institution The Oaks Hotel is heading to the market for the first time in 50 years, with the sellers hoping to make history with a $175m-plus sale.
One of the nation’s most well known hotels will for the first time in 50 years go up for sale, with a record price tag of more than $175m.
The Oaks Hotel, a popular outfit in Sydney’s lower north shore in Neutral Bay, is expected to smash the record for the largest sale of a pub venue in a process run by JLL’ John Musca and Ben McDonald.
The offer of The Oaks will likely trigger a battle between pub billionaires and listed companies for control of the Sydney icon with many having coveted the hotel for years.
Industry players already made attempts to secure the property with several unsolicited offers received prior to the announcement of the sales process.
Potential buyers with the capacity to buy such a large property include billionaire pub mogul Arthur Laundy, the owner of 80 Australian pubs, and Iris Capital’s Sam Arnaout, who has also stepped up to buy two regional casinos.
The listed Endeavour Group, whose major shareholders include pokies and pubs magnate Bruce Mathieson at 15 per cent, is another company which may be interested.
The sale could mark a peak in the extraordinary pub boom that has seen well over $1bn of pubs change hands in NSW just this year.
Throughout the pandemic, Australian pubs reached new highs, with the Beach Hotel in Byron Bay setting a record when it sold for $104m to the Moelis Fund in February 2020. That was broken again in April this year when The Crossroads Hotel in Sydney’s Casula sold for almost $160m to former Sydney Lord Mayor Nelson Meers.
The Oaks Hotel, which was built in 1885, has been owned by the Thomas family since 1975. Andrew Thomas, a spokesman for the family, said the family felt it was time to move on and focus on its other venues, the Winston Hills Hotel and The Entrance Hotel.
“On the back of a spate of unsolicited approaches it just feels like the right time for the family to move on and we’ll leave The Oaks with fond memories and many friends,” he said.
“It holds a very special place in the Australian hotel landscape, and we look forward to seeing its next incarnation under the new custodians.”
The Oaks, which often draws socialites from some of the city’s wealthiest crowds, has undergone several renovations over its century-long reign, the most of recent of which took place in 2013 when $4m was spent to attract younger patrons. In 2019, a multimillion-dollar renovation separated the venue into three separate venues; a sports bar, a bottle shop and takeaway and a conservatory.
The Oaks Hotel has several venues including Taffy’s Sports Bar, Alala’s Cocktail Bar, Bar & Grill Restaurant, its iconic beer outdoor beer garden centred around an oak tree, a 30 machine game room and a function space.
Sprawled across a 2188 sqm site, potential suitors would be able to develop up to five storeys overhead under B4 Mixed Use zoning rules.
JLL Hotels managing director Mr Musca said the sale was a once in a lifetime opportunity.
“As in all real estate sectors the premier assets often only come to market once in a lifetime, which is even more prevalent in the highly protected hotel industry where assets of this scale and quality will simply never be approved or replicated again in high-end Sydney demographic locations – we’re fundamentally talking about one of the very best hotels in the asset class,” he said.
“For those that accumulated wealth in mining, media, software, logistics or any other sector, once you finalise a business case, owning an iconic pub hotel in reality is far more fulfilling and exciting than any other form of investment.”
JLL Hotels senior vice president Mr McDonald said few other venues would hold such a special place in Sydneysider’s hearts.
“It is difficult to imagine any hotel in the country evoking as much emotion, brand heritage and rites of passage than the illustrious Oaks Hotel. It’s going to be a remarkably fulfilling asset for the next lucky generational owners,” he said.
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