Zagame family lists six gaming hotels with hopes for $300 million

The hotels for sale in Australia include Zagame’s Reservoir Hotel, Zagame’s Caulfield Club, Zagame’s Boronia Hotel, Zagame’s Ballarat Club, and Zagame’s Berwick Springs Hotel.

The five Victorian assets – including Zagame’s Boronia – make a combined net profit of $23 million. Photo: Supplied

The 4-star Grand Hotel and Casino in Vanuatu is also part of the listing. It includes a casino, VIP room and 74 luxury accommodation rooms across eight levels, as well as 16 gaming tables, 136 gaming machines and food-and-beverage facilities.

The assets can be bought individually or as a collective. Interest is expected from Australian and international buyers, particularly from Asia and North America.

Victor Zagame, who passed away in late 2017 at the age of 77, opened the Zagames’ first hotel in 1971, which was the Albion Charles Hotel. From that purchase, he built an empire.

The 4-star Grand Hotel and Casino in Vanuatu is also for sale. Photo: Supplied

The sale is believed to come about because the majority of the Zagames no longer wish to be associated with gaming.

“The Victorian gaming market is the tightest held in Australia with the RSL, Aussie Rules clubs and listed funds such as ALH Group and Charter Hall owning the vast majority,” selling agent Mark Wizel, CBRE national director, says.

“The five venues for sale in Victoria make a collective net profit of $23 million per year, which is very attractive.”

Cropley Commercial director George Iliopulos, who also holds the listing, says the new gaming laws in Victoria has given a boost to the sector.

“The state government’s decision to extend gaming licenses until 2042 has provided operators with certainty and has made Victoria’s 13,750 pub gaming entitlements much more sought-after and valuable in Australia’s fastest growing state,” he says.

Mr Cropley says the value of the portfolio had increased since the government’s recent announcement to freeze the number of poker machine numbers for the next 20 years and increase the current machine ownership terms from 10 years to 20 years. This essentially provides the incoming purchaser with 24 years of absolute certainty around the existing 490 gaming machine entitlements.

Zagame Corporation director Victor Zagame Jnr, says the incoming purchaser would be buying a proven business model that had grown successfully over 50 years.

“Our venues are exceptionally well-presented, our staff are leaders in the industry, and our product is second to none,” Mr Zagame says. “These successful businesses are well-placed to continue to deliver substantial growth.”

Mr Wizel says all hotels within the portfolio are located on large landholdings in central suburban locations.

“These sites offer future mixed-use development options, adding significantly to the potential upside available within a portfolio of quality and scale that very rarely comes to market,” he says.

He adds that he doesn’t expect the Australian assets to be broken up.

“I expect there to be significant interest before the end of the financial year and a sale completed not long after.”