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News release


Coles tenanted hotel divested

Payneham Tavern & Drive Thru Liquorland in Adelaide sold for $10 million

Listed real estate investment trust, HPI, have divested the Coles tenanted Payneham Tavern & Drive Thru Liquorland in Adelaide for $10 million, in a transaction managed by Jamie Guerra, Mathew George and John Musca of JLL.

The asset was sold on a 5.8% yield and is subject to a long-term lease to the Liquorland tenancy covenant, with a 20-year initial term and two ten-year options thereafter.

Jamie Guerra, JLL Adelaide - Managing Director, stated, "Quality investments in the South Australian market will continue to attract national purchasers' interest and we expect further yield compression as buyers compete for limited opportunities."

Mathew George, Vice President - Investment Sales, added, "The five week expressions of interest campaign, not surprisingly, attracted huge interest from the investment community with over 50 enquiries nationally, generating 11 keenly contested bids to purchase."

Strategically situated only five kilometres from the Adelaide CBD in the prized north easterly residential suburbs, the Payneham Tavern occupies a large 7,887sqm left-hand side site area and includes lessor ownership of a valuable 32 gaming authorities and hotel licence. In addition, the lease has built-in annual rental increases of approximately 4% with the tenant responsible for all outgoings.

"Investment hotels with preferred ALH or Liquorland leases have evolved into a retail asset class of choice nationally, with the investment community engaged with the strength of tenancy covenants and the attractiveness of these unique lease structures and additional licensing assets underpinning these properties, in a low interest rate environment." Concluded John Musca, National Director – Investment Sales.