Redcape Hotel Group buys Kings Head Tavern in Hurstville, offloads Granville's Royal Hotel
The Redcape Hotel Group has offloaded the Royal Hotel in Granville to private investors in an off-market deal valued at $51 million.
The announcement was made in an update to the ASX on Monday, December 16, which also divulged the off-market acquisition of the Kings Head Tavern in South Hurstville by the group for $27 million.
In a strange twist that provides a glimpse into the consolidated nature of Sydney’s hotel market, the purchasers of the Royal Hotel were the vendors of the Kings Head Tavern.
The sale of the Royal Hotel reflected a 6.25 per cent premium on the book value, according to the ASX update.
Both transactions were brokered by JLL Hotels and Hospitality group’s John Musca.
The Royal Hotel is located on a site opposite Granville train station and includes 30 electronic gaming machines (EGMs) as well as public and sports bars. The pub is ranked in the top 30 gaming hotels in the state in terms of annual revenue from gaming machines.
Redcape chief executive Dan Brady said that the sale was in line with the group’s long-term refurbishment strategy.
“These transactions are consistent with Redcape’s strategy of portfolio optimisation and demonstrates our continued focus on acquiring venues where we can increase value by enhancing their operations and applying our refurbishment capability,” Mr Brady said.
The sales cap off a strong year of hotel transactions for JLL, with the firm reporting a record 15 transactions in metropolitan Sydney.
Mr Musca said that it was rare to see such prominent sites change hands in “a rapidly consolidating asset class”.
The Kings Head Tavern – which has an event schedule including ‘topless Tuesdays and Thursdays’ – includes 27 gaming machines, a restaurant, public and lounge bars, drive-through bottle shop and beer garden.
The property is situated on a 1334-square-metre site on King Georges Road that offers the potential for future multi-level, mixed-use development subject to council approval.
“After years of unsolicited buyer approaches, the long-time owners sought JLL’s assistance to facilitate the sale,” Mr Musca said, adding that the buyers’ acquisition of the Royal Hotel was in keeping with their long-term local property and hotel aspirations.
The announcement comes as Redcape prepares to settle on another divestment.
The group recently sold the St George Hotel in Belmore for $47.1 million – a 2.7 per cent increase to book value – with settlement due today.
The group settled on its acquisition of the Eden Brewhouse in Queensland’s Redbank Plains for $11.5 million earlier this month.
