Wagga Wagga hotel sets regional pub record with $29m sale

The Vic, as it is known by locals, was the third acquisition for Harvest Hotels’ second pub fund which raised $48 million from wholesale investors last year to acquire four large-format venues in regional NSW.

Across its two funds, Harvest Hotels, which is led by Sydney-based publicans Chris Cornforth and Fraser Haughton, now owns and operates seven venues worth about $160 million.

The Vic is the second Wagga Wagga venue acquired by Harvest Hotels, after it purchased the William Farrer Hotel in July last year.

Mr Cornforth told The Australian Financial Review Harvest Hotels focused on properties in “high-growth areas with good population growth, a good mix of new families coming into the area and where different industries supported local GDP”.

“There’s a lot happening in Wagga Wagga. There’s a huge number of industries, tons of sporting clubs, an army and airforce base and lots of development underway,” he said.

Asked why pubs, especially those in regional areas, were proving so popular with investors at the moment, Mr Cornforth said they were a “good business that is simple to understand” and where people can “touch and feel what they are putting their money into”.

The Vic was offloaded by Sydney-based Waratah Funds Management, which held the pub in its unlisted Waratah Hotel Group.

Waratah FM director Darren Baker said the Victoria Hotel had been divested after 15 years of ownership, and after receiving numerous unsolicited approaches from prospective buyers.

“Consistent with our recent divestment of the Amaroo Tavern in Moree, we recognise the strong demand and limited supply for quality regional hotel assets across NSW,” Mr Baker said.

The sale of the Victoria Hotel was brokered by Sam Handy of HTL Property, who said it was a record for a regional pub (a definition which excludes coastal and metropolitan properties).

Standing on a 1311 square metre landholding, the large format pub features a separate cocktail bar known as The Loft on the building’s first floor, a public bar with TAB, an undercover beer garden and bistro.

Alongside the Victoria Hotel, Harvest Hotels’ second fund owns The Woy Woy Hotel and the Northside Hotel in Albury, both purchased in December. The fund will pay a 9 per cent distribution to investors.

The sale of the Victoria Hotel follows two record-breaking pub deals, both brokered by HTL Property. The $160 million sale of the Crossroads Hotel to publican Nelson Meers set a national record while the $35 million divestment of the Caves Beach Hotel in Newcastle was the highest for the NSW city. Maureen Thornett’s Royal Hotels Group sold Caves Beach to Oscars Hotels, headed by brothers Bill and Mario Gravanis.

In another big pub deal also near Newcastle, the Lake Macquarie Tavern in Mount Hutton was purchased this week by the diversified Don Hodge Group for $33 million on a yield of 5.4 per cent.