The regional Queensland pub market is set for big year with buyers looking for opportunities

After being hit by the COVID slowdown, a section of the Queensland pub market is expecting a big year with buyers attracted by surging local economies and huge potential returns.

THE Queensland regional pub market is expected to surge this year with owner/operators tapping into the opportunity for big returns for hotels in country areas backed by strong local economies.

Power Jeffrey & Co’s Andy Nason said with local support most country pubs weathered the coronavirus storm last year and the market was primed for a strong 2021.

“The regional hotel market will be absolutely flying this year,” he said.

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“And the main reason is that money is so cheap. You can borrow at 2.5 per cent and get an 18 per cent return.

“I actually describe these pubs as excellent milking cows. You plug them in and milk them for five to 10 years.”

The Commercial Hotel in Gatton, west of Brisbane.

Mr Nason said in a tough 2020 the standout sales were Tony Prentice’s Weeroona Hotel at Goodna to the Falvey Hotel Group and his Walloon Hotel to the Gibson family.

This year the agency has kicked off an auction campaign to sell Mr Prentice’s Commercial Hotel in Gatton, west of Brisbane, later this month.

Other regional pubs/motels seeking new owners including Tieri Brologa Hotel/Motel, Pit Pony Tavern/Motel in Collinsville and Banana Hotel/Motel, all in central Queensland.

Mr Nason said they were what he labelled “rounded pubs” with gaming, accommodation, bars, food and retail located in an increasingly strong economic region.

Power Jeffrey & Co's Andy Nason.

“Regions like central Queensland are absolutely booming with mining, cattle, grain and all of that. People don’t understand down here. It’s pumping,” he said.

“In a lot of regional areas there’s a huge amount of activity with the building of solar and wind farms and that’s driving accommodation, particularly in central Queensland.

“It’s actually happening in almost every regional area.”

National director, hotels at Savills’ Leon Alaban said in 2021 he expected Victorian and NSW Hoteliers diversify their portfolios by venturing into Queensland.

“Yields are expected to compress as buyers seek returns better than term deposit interest, and property is considered a safe haven investment,” he said.

“Large regional assets will be sought after as buyers continue to seek higher yielding returns along with large suburban metro gaming venues will remain the sought after commodity”.