Rocks icon the Harbour View Hotel is up for sale
One of the more famous pubs in Sydney, the Harbour View Hotel in the Rocks, will test the market with the long-time owner calling last drinks.
Located in the most tightly held hotel precinct in the country, it is being offered for the first time in 20 years by the retiring private owner, Brian Perry, and is expected to fetch about $12 million.
Interested parties lining up include pub owner and investor John Singleton, among others.
It represents one of the few freehold hotels in the Rocks area, which attracts more than 2.7 million visitors a year, and was a famous haunt of celebrity Paul Hogan and filming location for the 1982 Australian movie Starstruck.
The hotel comes with a long Sydney history since it was rebuilt in 1924 for Harbour Bridge construction workers.
The hotel has undergone a renovation and has been extended over the years. It includes the ground floor Oval Bar, gaming room with 15 poker machines, first-floor bar and restaurant and multiple function rooms.
The sale comes as demand in the pub sector is hitting new heights. In the past six months about $500 million worth of assets have changed hands as investors and pub operators seek well-located higher-yielding properties.
The Harbour View will also benefit from the revival of the area where substantial sales of Millers Point and Dawes Point property have seen residential rates average $20,000 per square metre.
JLL national director John Musca said that “this is a compelling asset and, with the hotel licence and gaming entitlements having a separate, tangible $3 million value, savvy property people have the opportunity of owning the building for less than the price you would pay for an exclusive house in the area”.
“It’s a very special, generational asset for an investor or hotelier and, subject to relevant approvals, the Harbour View could also make an aspirational office or residence as well as a hotel.”
Mr Musca said the opportunity comes at a particularly buoyant period in the hotel market which has seen numerous sales in Sydney and continued consolidation.
JLL’s Nick Butler finalised the sale of the Empire Hotel in Annandale for $10.3 million this week which came following JLL’s sales of the leasehold interests in the Criterion Hotel and PJ’s Enfield for about $20 million combined.
Mr Butler said “the Harbour View is the last of the freehold pubs you can buy in the Rocks and with such an underperforming business and a world-class location, it has broader appeal than your average hotel”.
Iris Capital also announced its acquisition of the Cambridge Tavern for $56 million this week in a deal brokered by Mr Musca who said “the sheer scale of this half-hectare site along with its history as a top state-based gaming and wagering business, really played to the unique pedigree of Iris as hotel operators and eventual site optimisers”.
“The transaction reflected an alignment of interests between ALH national leasehold hotel owners, the private Brisbane-based freehold owners and the purchasers who instinctively recognised the intrinsic value-add opportunities for the asset,” Mr Musca said.
The hotel market is expected to remain active with Mr Butler suggesting that JLL has more than $250 million of pub sales currently in various stages of negotiation or agreement across the country so the capital drivers clearly remain compelling to both public and private equity sources across the board.
