Pub boom pours $127m bonanza into Pub Invest pockets as Crown Hotel in Surry Hills trades

The latest round of big sales have benefited creditors of the trust who have reaped better than expected returns.

The Crown Hotel, Surry Hill, has sold as part of a $127m portfolio.

Backers of the pub empire assembled by ex-Citi banker Damian Kelly have reaped an above expected $127m for the portfolio, with the latest batch of sales including the Crown Hotel in Sydney nudging up the proceeds.

The creditors who voted last December to liquidate four pubs welded into an investment trust under the Pub Invest umbrella by the former banker have received a windfall as they had expected to net more than $110m.

The final two properties in the Pub Invest portfolio – the large-format North Nowra Tavern and inner-city Crown Hotel – were sold by HTL Property after an on-market campaign directed by Wexted Advisors. The last two hotels attracted a combined price of $52m, taking sale proceeds from the four-pub portfolio to $127m.

Just last month the first two properties – the Rose & Crown Hotel in Sydney’s Parramatta and the Corrimal Hotel in the NSW city of Wollongong – were snapped up for $74.5m.

“All four hotels sold represent excellent examples of strong freehold assets with historical and scalable earnings profiles,” HTL Property’s Dan Dragicevich said.

The buyer of the North Nowra Tavern remains undisclosed, while the Crown Hotel in Surry Hills has been acquired by experienced pub group Universal Hotels.

“We’re most satisfied with the sale quantum and process, and buoyed by the market appetite the campaign highlighted,” Wexted Advisors’ Andrew McCabe said.

The pub market has continued to boom with many owners riding a tide of gaming revenues, domestic tourism and the bounce back from the pandemic.

When comparing the first quarter against last year’s busy market, HTL said this year had already seen the national record hotel sale, with the Crossroads Hotel selling in Sydney’s Casula for $160m, as well as records being smashed with big sales in Newcastle and Wagga Wagga.

“Market depth is wholly reconfirmed following this well-supported portfolio sale and separately the price points achieved reflect a continuation of the firm yields successful investors are regularly applying … to secure assets of this quality,” HTL managing director Andrew Jolliffe said.

Wagga Wagga’s popular Victoria Hotel sold last week for $29m. It was sold by Waratah Fund to Harvest Hospitality.

Both funds mainly have been focused on acquiring the best regional pubs in the strongest regional towns across NSW as domestic tourism surges.

Waratah Fund had owned the Victoria Hotel for more than 15 years.