Skip Ribbon Commands
Skip to main content

News release

Sydney

Buyers pour into hotel market

PJ Gallagher's in Leichhardt sold for circa $14.5 million


​In a sign of the continued appetite for quality hotels in Sydney, JLL Hotels & Hospitality Group are delighted to announce the sale of PJ Gallagher's, Leichhardt for circa $14.5 million.

The Norton Street icon recently underwent an impressive $2 million dollar renovation and includes 28 gaming machines, and sought-after 5am trading licence. Situated on a prominent 600 square metre corner site the hotel is set to benefit from ongoing intensified apartment development under the draft new planning guidelines and a resurgence of the famous restaurant and retail strip.

JLL National Director, John Musca suggested "Much like the recent contested sales of the Royal Exhibition Hotel, Surry Hills ($19 million) and the Duke of Gloucester Hotel, Randwick ($16.25 million), PJ's is another quality city fringe hotel which deservedly attracted strong interest."

The frenetic transaction activity of late last year has spilt into 2016 with the aggressive expansion of the Public House Group and a number of other acquisitive newly formed private equity syndications moving to accumulate portfolio scale.

Developers continued to seek out hotels on larger metropolitan sites where new council planning regulations have fostered alternate use development schemes and fuelled an estimated $100 million of  transactions including the sale of the Bull & Bush Hotel, Penshurst Hotel and Kings Head Hotel .

"The cash rate/yield spread maintains capital market engagement with the asset class and, as the market continues to nationalise, boardroom strategies are now driving expansion and reinvestment beyond the traditional private ownership approach." Mr Musca said.

PJs was sold by interests associated with Gallagher Hotel Management owners and operators of 14 hotels across Sydney. Last month JLL sold the leaseholds in the Liverpool Hotel and Corner Pub for the group for a total $12.5 million, so that the group can focus on freehold opportunities.