Criterion Hotel lease snapped up for $15m
Pub operator Tilley and Wills Co has expanded its presence in Sydney’s city pub scene after paying about $15 million for the leasehold of the large-scale Criterion Hotel in Pitt Street.
It was sold by Gallagher Hotel Management group and comes amid a spate of pub sales across Sydney worth a combined $60 million in the past week.
Private syndicate Tilly and Wills Co will add the Criterion to its stable of the Verandah Bar in Castlereagh Street, which it bought for $9 million in 2017. The syndicate has also moved into the field of specialist hotel management and operates the upmarket Buena Hotel in Mosman and the Clovelly Hotel, on behalf of private owners.
Advisor to the sale, JLL’s hotels and hospitality group’s John Musca and Tom Gleeson, said the hotel is set to benefit from a recent $3 million renovation and is ideally positioned opposite the new Pitt Street CBD Metro Station.
“Sydney CBD hotel opportunities are in very limited supply so, having received 12 bids from suitors across three states and of very differing buyer profiles, it was no surprise to see the hotel operation keenly contested,” Mr Musca, JLL hotel’s national director said.
“Prior to the recent announcement of the Woolworths ALH-Mathieson demerger, ALH sold the long-term leasehold interest in the Cambridge Tavern at Fairfield for $18 million via JLL.”
Mr Musca and Mr Gleeson said both the Cambridge and Criterion leasehold sales point to a renewed capital appetite for hotel cash flows under the long-term leasehold tenure model.
“This is supported by the progressive national expansion of KKR’s Australian Venue Company following the completion of the Coles hotels acquisition in March and their mooted earnings push prior to 2020 planned initial public offering,” Mr Musca said.
“We see no foreseeable end to the capital flight to the asset class.”
Included in the spate of sales in the first week of the new financial year has been the Harold Park Hotel for about $6 million via JLL to the private Oscars Group; the Oxford Hotel, Drummoyne to the Laundy family for about $42 million and the Friend in Hand, Glebe to the Young family for $10 million, though HTL Property.
“JLL have exchanged seven hotel transactions in the past few weeks alone ranging from $4 million – $56 million, satisfying the prioritised investment requirements of our valued private and corporate clients and with more transactions to announce, particularly off-market,” Mr Musca said.
JLL is also selling the popular Harbour View Hotel in Sydney’s Rocks, worth about $12 million. It is a famous haunt of celebrity Paul Hogan and filming location for the 1982 Australian movie Starstruck. The hotel was rebuilt in 1924 for Harbour Bridge construction workers.
