A historic building on a prominent corner site, home to a popular pub in an inner-city tech hotspot, has finally been snapped up by an investor for $9 million.
The freehold of Harlow, at 447 Church Street, Cremorne, was acquired by ASX-listed Charter Hall after hitting the market in February. The property development and funds management company bought into a sector “they want more exposure to.”
The property, formerly the Great Britain Hotel, encompasses an 1100-square-metre building with a rooftop bar, a ground-floor bar and dining area, a split-level beer garden and a basement bar. It is on a 485-square-metre corner block with more than 45 metres of street frontage along Church and Lesney streets.
The property – in a “booming location” dubbed the city’s “Silicon Yarra” because of the technology companies it attracts – was sold reflecting a 5.75 per cent yield, by Fitzroys’ Paul Burns and Chris James.
“This was one of Melbourne’s premier pub offerings in 2024, recognised by private players through to major institutional investors as really good real estate,” said Burns.
Harlow is run by one of the nation’s largest venue operators, Australian Venue Co. (AVC), which has a long-term lease until 2039, plus two 10-year options. AVC’s annual turnover exceeds $1 billion, and it has a 215-venue portfolio in Australia and New Zealand, including St Kilda’s The Esplanade Hotel, known as “The Espy”.
Harlow, directly opposite East Richmond train station and close to tram stops along Church Street and Swan Street, makes $516,785 per annum net, with 3 per cent annual rent increases and a market review at option.
“Charter Hall was drawn to the asset as they recognised it as good real estate, offering a long-term lease to a major hospitality operator located in the Richmond and Cremorne hotspot. This is a sector they want more exposure to,” he added.
The venue’s neighbours in and around Cremorne’s “technology precinct” include major commercial occupiers such as Carsales, Seek, Disney, Tesla, NDIS, MYOB, Adidas, Australia Post, Red Energy, Reece, 7-Eleven, Uber, Mattel, Domain and 2XU.
The acquisition represents another investment from Charter Hall into the precinct, following their nearby development of Australia Post’s new headquarters.
Burns said the yield was typical in this current market, adding it was “incredibly rare” for an asset such as this to be offered, particularly with this price tag.
“Hospitality yields are generally slightly higher than other classes such as fast food, even though they are generally as secure when tenants like Australian Venue Co. are committed to the long-term,” he said.
“The investment fundamentals are extremely strong, featuring a mostly net lease with a 25-year term and long options to one of Australia’s best hotel operators.
“We expect the yield will tighten again as the economy stabilises, while the asset, in the meantime, offers guaranteed income from a blue-chip tenant with fixed increases.
“This simply represented good real estate in a booming location.”
When listed earlier this year, the property, which has serviced the thirsty mouths of visitors as a licensed premises since the 1850s, hoped to attract $9.5 million.
The venue is close to Swan Street and fronts Church Street, where restaurants, cafes and bars collide in one of Melbourne’s busy entertainment precincts close to the Melbourne Cricket Ground.
“The commercial, lifestyle and location fundamentals of the area clearly encourage strong market participation across a range of sectors, from office developments through to pub investments,” Burns said.
