A good time to sell: ALE puts Berwick Inn on the market
Australia’s biggest listed owner of freehold pubs, ALE Property Group, has commenced its first major asset sale in seven years, with the listing of the Berwick Inn in Melbourne’s outer south eastern suburbs.
Around $25 million is expected for the two-storey venue leased to Woolworths-backed operator ALH until 2028.
ALE managing director Andrew Wilkinson told The Australian Financial Review it was a “good time to put one of its better properties on the market”.
“It’s in a great location in a high growth area. We did also notice the recent sale of the Dan Murphy’s in Alphington for $22 million, which shows the Melbourne market is a good one to put the better properties up for sale in,” Mr Wilkinson said.
While ALE did sell the Victoria Hotel in Shepparton for $4.5 million as recently in 2014, it most recent major sales were in 2009 and 2010 when it sold 17 properties.
Mr Wilkinson said he expected the Berwick Inn to sell on a “sharp yield” a result the group would “bring to the attention of its valuers”.
ALE owns a portfolio of 86 freehold pubs leased to ALH with a combined value of just over $1 billion. Over the past three years the portfolio’s weighted average capitalisation rate has tightened to 5.14 per cent from 6.42 per cent as the sector has transformed into one of the best performing property asset classes.
The group has not made an acquisition in 10 years but Mr Wilkinson said it was “looking at a couple of opportunities. “We’re very discerning buyers,” he said.
The Berwick Inn is being marketed by CBRE agents Daniel Dragicevich, Scott Callow and Justin Dowers. The pub stands on a 4166-square-metre site and comprises bar, bistro, beer garden and gaming facilities as well as a 50-space carpark.
“Typically, hotels with the blue chip tenant covenant of ALH trade at between 100-150 basis points sharper than those with private tenants. ALH leased properties have actually been in very short supply in recent times, so a keenly fought sales campaign is expected,” Mr Dragicevich said.
