Hot on the heels of the record pub sale for 2014 in the form of the Tea Gardens in Bondi Junction, leading broker Andrew Jolliffe has negotiated the highest on-market sale for the past five years for Woolworths tenanted hotels.
Set across more than 5800sqm of prime commercial property in Sydney's Western suburb of Fairfield, the Cambridge Tavern has been a mainstay in the State's top gaming rankings.
Jolliffe, Ray White's Asia Pacific Region Director, advised that the sale was concluded following a proposed four week Expressions of Interest campaign which barely made it through the first week.
"On behalf of our client we instigated a four week strategic campaign reaching out to both national and international clients, and had a contract for sale exchange shortly after the first week of advertising."
The price, believed to be in excess of $20m, sets the record for transactions involving Woolworth's hotel arm ALH as a long term tenant.
"We saw a strong trade last year of the Austral Hotel in Mackay, for $19m, another ALH leased hotel asset, however sales at north of $20m are very rare given the scarcity of stock."
"Over the past five years we have been involved in the sale of numerous Woolworth's tenanted hotel assets, and as such have an active client list of purchaser's for same. That said, assets like the Cambridge Tavern are seldom brought to market, so the multiple offers received in the first week of marketing was hardly surprising" commented Jolliffe.
"With options, the Cambridge Tavern owner currently enjoys a lease to ALH (Woolworths) until 2058, and in addition retains ownership of the hotel licence and 30 poker machines."
The recent and highly successful IPO of Redcape's Coles Liquor (Wesfarmers) tenanted assets via the HPI vehicle, as well as ALE's continued success as key landlord for ALH, highlight the market depth and appetite for investment grade hotel assets pursuant to long term leases to Coles and Woolworths.
"Covenants like ALH and Coles provide an element of comfort and certainty to investors wishing to take a position in the hotel landscape. As operators they are first class, and as corporate citizens and pro-active tenants they enjoy almost unparalleled comparison."
Jolliffe also managed the 2012 off market transaction of 32 leasehold hotel assets sold by the Laundy family to ALH.
