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News release

Sydney

Mid-North Coast hotel sale tops year

Toormina Hotel, Coffs Harbour sold for $10 million


In the largest regional hotel sale of the year, JLL Hotels & Hospitality group are delighted to announce the off-market sale of the Toormina Hotel in Coffs harbour for $10 million.

Sydney-based Pelathon Group, recent acquirers of the Courthouse Hotel in Cairns, sold the hotel on behalf of co-investors to JV interests associated with well-known publicans, Martin Short and Sean Ohara.

Extensively renovated, the Toormina Hotel boasts 20 gaming machines, large public, TAB and bistro bars, new gaming room and bistro, drive thru bottle shop and extensive beer garden. The hotel uniquely benefits from its 'Holy Grail' location in the car park of the Toormina Shopping Centre, which includes anchor tenants Woolworths, Coles and Aldi, along with 40 specialty stores and over 400 car-bays. The hotel has no competition in servicing the southern suburbs of growing Coffs Harbour and boasts a 20% annual trade growth.

JLL Hotels & Hospitality Group National Director, John Musca negotiated the off-market sale. He suggests, "The transaction follows the now normal pattern of regional equity flight from Sydney, which driven by the city's severely constricted hotel supply, has astute operators looking to the larger growth centres throughout the state in pursuit of yield".

Regional New South Wales hotel sales have lifted in 2016 at a time when operators, newly formed funds and investors have been starved of acquisition opportunities in the greater Sydney area – which is seeing the lowest level of transactions for nearly five years. Recent regional sales include the Bowral Hotel in Bowral, Exchange Hotel in Hamilton, Lawson Park Hotel in Mudgee and the Corrimal Hotel in Corrimal for circa $25 million.

"With the ability to secure debt funding at sub 4% and with the potential to secure sustainable double digit yields for quality scalable hotels with attractive business spread, for certain hoteliers the aggregation of regional hotels represents a sound capital deployment and growth strategy." Musca said. "To be colloquial about this particular renovated pub, being in a shopping centre carpark with big-name anchor tenants, was the proverbial no-brainer hotel investment."