Regional Hotel Sale Sparks Activity
Following the sale of Arthur Laundy’s Bateau Bay Hotel last week, the New South Wales regional freehold hotel market continues to show no sign of slowing down with the sale announced by Ray White Hotels Australia of another significant regional transaction having taking place.
In what is one of the largest regional NSW pub transactions for 2017, the Belmore Hotel in Maitland has been sold to a prominent local businessman in a deal worth $9 million. The on-market campaign was executed by Blake Edwards, Andrew Jolliffe and Xavier Plunkett of Ray White Hotels Australia on behalf of long-time owners the Murphy family. Having indicated that their investment focus is shifting, and after 14 years in the hospitality industry, the Murphy family felt like it was the right time to divest the large commercial property holding in the main street of the repurposed Maitland CBD.
“We’ve owned the hotel since 2003, and since then we have all grown older and want to do a bit more of our own thing,” said Luke Murphy. “We still have development interests in the area, which we will now shift our focus. It was not an easy decision to sell as we have made many community ties and friendships out of the pub and the Maitland community has been a big supporter of ours. On behalf of my family I would like to wish the incoming purchaser all the best.”
The Belmore Hotel sits in Maitland City in the Hunter Valley Tourism Precinct, and the 2011 Census was determined it NSW’s fastest growing inland urban centre. The hotel enjoys several bars, a thriving bistro, gaming room with 19 EGMs, 18 pub rooms and a large outdoor beer garden with diversified weekly revenue of approximately $100,000 per week.
“In recent history we have enjoyed considerable success in the Maitland LGA, having also sold the Bradford Hotel late last year to an O’Hara-Malloy led partnership for a record price,” said Blake Edwards.
Commenting upon the various demand drivers for the high level of interest in the sale process for the Belmore Hotel, Blake Edwards believes the property benefited from a number of business and property positives.
“Strategically, the well-structured nature of the hotel operation on offer at the Belmore Hotel made sense for our purchaser. Although it may sound cliché, it all comes back to the basic investment fundamentals, including strong population growth, a familiarity with the local area, close proximity to a large base of both white and blue collar industries and a distinct absence of large scale competition in the immediate area,” he said.
Ray White Hotels Australia Asia Pacific Director, Andrew Jolliffe, expects the regional market to maintain its current trajectory, and market depth, given the limited opportunity in metro areas; as well as the growth of commercial and residential markets in regional centres.
“Whilst ever interest rates remain at historical lows, and compressed yields continue to price investors out of metro markets, it is hard to imagine any abatement to the increased level of market activity and price appreciation enjoyed by A grade properties in these large regional cities,” he said. “Our business enjoys access to 114 regional offices, making ours the largest network in the hotel space; and providing us with both excellent coverage, and a network of receptors via which we can gauge the sentiment and activity in a given area
“This is a powerful point of difference to enjoy, and a clear contributor to the success of the sale of this significant regional hotel.”