Virtical Development buys Kinselas, Courthouse Hotel in Sydney sell for $61m

Two of Sydney’s much loved pubs have been sold for $61m, due to a lag in the revitalisation of Oxford Street.

Cashed-up property developer Virtical Development has purchased two iconic Sydney venues Kinselas and the Courthouse Hotel in Taylor Square for $61m from MA Financial Group.

MA Financial Group said it had grand plans to restore the hotels after Covid-19, but the lag in the revitalisation of Oxford Street in Sydney had taken its toll.

MS Financial Group hospitality platform managing director Chris Unger said the original investment strategy was dependent on favourable trading conditions emerging from the first Covid-19 lockdown, and the anticipated resurgence of Oxford Street following the repeal of the city’s lockout laws.

“However, the precinct and surrounding area has taken an extended period of time to revitalise,” he said.

“Whilst we are confident the precinct will thrive over the longer term, this combined with changes in the construction and funding markets has meant the timeframes associated with redeveloping the iconic site now sit outside of the fund’s target investment horizon.

“Accordingly, we have decided to sell the assets to Virtical, which has the opportunity to pursue its own repositioning strategy on a different timeline and as part of a broader portfolio.”

Kinselas Hotel in Darlinghurst, Sydney. Picture: Supplied

Virtical also recently purchased the Republic Hotel, on the corner of Sydney’s Bridge and Pitt Streets, and the Adelphi Hotel in Flinders Lane, Melbourne, with the deals taking Virtical’s recent acquisitions to more than $120m.

Virtical’s managing director Mark Toma said the addition of the Taylor Square hotels complements the group’s broader strategy for the assets in its portfolio.

“We have a strong track record in the construction and development across various real estate sectors, including hospitality projects, and we’re well positioned to realise the potential of the precinct.”

Kinselas and Courthouse Hotel were acquired by MA Financial’s MA Taylor Square Fund in December 2020, and they took possession of the venues prior to the second Covid-19 lockdown in July 2021.

The Taylor Square Fund sought to take advantage of the consolidated site through repositioning and potentially redeveloping the iconic site into a significantly expanded hospitality offering.

According to a press statement, Virtical, which builds high rise apartments, has more than 50 years’ experience controlling $500m worth of a diversified portfolio of assets.

Savills Australia state director Nick Lower said Virtical’s acquisition of this prime property showcases their commitment to enhancing Sydney’s hospitality scene. Their reputation for adding premium opportunities to their portfolio is a testament to their vision and expertise.”

While Savills Australia National Director, Hotels Tony Bargwana, claimed the transaction is a clear indication of the ongoing confidence in Sydney’s pub market. “It reflects the strong demand for assets that offer both operational success and the potential for future growth.

“Kinselas and Courthouse have long been cherished by the local and surrounding community, alike.”