Pub baron Mazen Tabet buys St Kilda hotel for $31m
Pub baron and developer Mazen Tabet has acquired St Kilda’s popular Village Belle Hotel in inner Melbourne for $31 million on a yield of 4.7 per cent as the booming pub sector ends the year with string of big sales.
The two-storey venue, which occupies a large 1308-square-metre site on the corner of Acland Street – St Kilda’s famous but now struggling retail strip – and Belford Street, was put up for sale in October by its long-term owners, brothers David and Stephen Shannon and their brother-in-law Brett Cuthbert.
Its listing came soon after the joint owners secured a new 10-year lease to private equity-backed Australian Venue Company, one of the country’s biggest hotel operators.
The Village Belle, built in 1891, underwent a $15 million renovation and expansion in 2017 that added a huge steel and glass atrium with a retractable roof to the heritage building as well as 12 apartments built at the rear of the hotel.
The sale to Mr Tabet, who owns Mornington Peninsula’s Portsea Hotel and St Kilda’s Royce Hotel among other assets, follows PwC Australia partner Andrew Wheeler buying the Pub@Rivo in Riverstone in Sydney’s north-west for $26.5 million this month and Rich Lister Arthur Laundy selling Orange’s historic Canobolas Hotel for $25 million to the Sukkar family in November.
More than $2 billion worth of pubs – a record for a calendar year – are expected to have changed hands by the end of 2021, with the Laundys, Merivale’s Justin Hemmes and ASX-listed Hotel Property Investments among the prominent buyers of multiple venues.
On the divestment front, Melbourne’s Zagame family and Sydney’s Stanford family have cashed in on the depth of buyers in the market to make well-time exits.
Record low-interest rates, the bounce back in trading following the end of lockdowns and the assets’ strong cash flows are some of the tailwinds driving investment in the sector at an unprecedented rate.
“The Village Belle certainly complements our current portfolio, with its excellent presentation and strength of tenancy,” Mr Tabet said.
The sale of the St Kilda hotel was handled by JLL’s Will Connolly, Stuart Taylor, Tom Noonan and MingXuan Li.
“As expected, the Village Belle proved to be one of the most hotly contested offerings for 2021, not just within the hotel investment space but also the retail sector,” Mr Connolly said.
“All corners of the market identified the obvious esteem of the property, being one of Melbourne’s most spectacularly presented venues after its extensive renovation and restoration in late 2017. Just as importantly though, the property was underpinned by the security of a blue chip covenant, with investors inheriting one of Australia’s largest hospitality operators in Australian Venue Co.”
Mr Taylor said the Village Belle had attracted interest from a mix of local and offshore high-net-worth investors, which highlights that private capital remains the most aggressive pursuer of “trophy” metropolitan Melbourne assets.
