Dove & Olive Hotel in Surry Hills being sold by the Good Beer Group. Photo: Airphoto AustraliaThe Good Beer Group is selling its Dove & Olive Hotel in Sydney’s Surry Hills with the cash raised being deployed to the planned upgrade of its recently acquired Duke of Gloucester Hotel in Randwick.
JLL national director John Musca is selling the Dove & Olive and said it had established itself as one of the busiest local hotels in Sydney, consistently generating over $100,000 per week in revenues.
Mr Musca said the offerings of craft beer and value-for-money food was what patrons were now seeking instead of just a bar with a television in the corner.
Demand for quality city-fringe hotels is on the upward trajectory as customers leave city-based hotels for a range of reasons, including the lockout regulations.
Pub sales are the hot ticket with close to $200 million of pubs changing hands in the past year in Sydney alone, with Melbourne not far behind.
Pub agents said this appetite augured well for the upcoming sale of the Keystone Group assets, which involve 16 leaseholds and one freehold food and beverage outlet across the country.
Keystone was placed into the hands of receivers and managers in June after failing to repay a debt of about $80 million owed to Californian private equity firm Kohlberg Kravis Roberts (KKR) and the Singapore-based Olympus Capital Holdings Asia.
Morgan Kelly, of Ferrier Hodgson, is working on the sale of the businesses, which include the Jamie’s Italian chain across the country and the Sydney-based Cargo Bay, Sugarmill, Kingsley’s Woolloomooloo and Bungalow 8, among others.
It is understood Mr Kelly is close to launching the sales process.
“The Dove is unique in that it will easily deliver astute purchasers a 10 per cent-plus yield at purchase, a rarity in the food and beverage-centric hotel space, with almost no risk and on a big revenue base, so it’s really a big hotel opportunity on a manageable footprint,” JLL’s Mr Musca said.
Other recent sales in Surry Hills alone, include the Trinity Bar for $8.5 million and the Royal Exhibition Hotel for $19 million.
Mr Musca said recent acquisitions by The Public House GroupDixon Hospitality have driven strong interest in city fringe hotel opportunities with freehold properties ultimately sought-out on the busiest locations.
Botany View Hotel in Newtown is also being sold through CBRE Hotels’ Sam Handy and Daniel Dragicevich on behalf of the Murphy family, which has owned and operatedthe hotel for the past 25 years.
Located in King Street, Newtown, the pub has extended trading hours and a first-floor beer garden with 2am closing approval.