Western Sydney pub family earns $134m payday

It is understood Bruce Solomon’s Solotel hospitality group, which owns and operates venues like The Golden Sheaf in Double Bay, The Clock in Surry Hills and Opera Bar at the Sydney Opera House, paid about $64 million for the 21,000 square metre venue on the corner of Woodstock Avenue and Duke Street.

The Stanford family, which is exiting the pub sector after more than four decades of involvement, is not done yet.

It will soon bring its final North Western Sydney hotel to market, the Pub@Rivo in Riverstone, which is expected to sell for more than $20 million.

Ownership and operations of the family’s hospitality empire is through a company called Bittini, which is directed by 85-year-old patriarch Donald Stanford, his wife, June, and children Glen (who now runs the business), Cathy and Sharon.

The most recently lodged accounts for Bittini, for the 12 months to June 30, 2019, show the company had revenues of $23.45 million (of which $8.9m came from gaming) and made a profit after tax of $3.23 million, down from $4 million in the prior year.

At June 30, 2019, the Vineyard Hotel (and neighbouring Gateway Motel) had a book value of just over $11 million while the Carousel Inn was valued at $17 million – an indication of how strongly pub real estate values have surged since then.

“We’re absolutely delighted with the sale [of the Carousel Inn] to the Solomon family, and look forward to concluding our portfolio divestment objective with the sale of our final North Western Sydney hotel asset in Riverstone, before the end of the year,” said Glen Stanford.

For the Solomon family, the acquisition gives it a foothold to expand the business in the North West – “a key growth corridor for Sydney”, according to Solotel CEO Elliot Solomon.

“We look forward to engaging with the community to better understand how we can take the venue into the future,” Mr Solomon said.

The sale of the Carousel Inn follows more than $1.5 billion of pubs changing hands in the 2021 financial year, a record figure.

The first four months of this financial year have continued on the same trajectory driven by the increasing appeal of the cash flow-generating asset class to both institutional and private investors as well as operators looking to expand.

HTL Property’s Dan Dragicevich, Andrew Jolliffe and Sam Handy brokered the sale of the first two Standford hotels, and will also handle the sale of the last pub in their portfolio.

“Genuine AAA grade large format hospitality opportunities such as the Carousel Inn are increasingly scarce in metropolitan Sydney, and the price and yield achieved bears testimony to this fact” said Mr Dragicevich.

“Of the ten most recent comparable sales by location and gaming segment the first seven, based upon chronology, represent an average cap rate of 6.7 per cent, whereas the most recent three indicate an average cap rate less than 5 per cent,” he said.