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News release

Sydney

Scarce suburban Sydney hotel opportunity comes to market

Lone Pine Tavern, Rooty Hill sale expected to attract $30 million


In the tightest held hotel market for nearly a decade, JLL Hotels & Hospitality Group has been exclusively appointed to take the Lone Pine Tavern in Rooty Hill to market. For sale by tender, the impressive, high cash flow tavern is expected to attract $30 million.

Situated adjacent to the Rooty Hill train station, the extensively renovated Lone Pine Tavern offers public bar, TAB and wagering bar, bistro and bistro bar, gaming lounge with 28 gaming machines, function room, large beer garden, children's play area , drive-through bottle shop and car-parking for 170 cars. The Tavern occupies a strategic one hectare plus site and trades with the benefit of a valuable 3.00am hotel licence.

John Musca, National Director – Investment Sales, suggested, "In the first half of 2016 we have witnessed an unprecedented scarcity of large suburban hotels available for purchase and there's not been a single coveted top ranking gaming asset transacted, so there exists a logjam of private and public sector capital seeking acquisitions in the asset class."

The tavern is being sold by private Sydney hotelier family, the Feros Group, who are in the midst of developing a number of new greenfield hotel and hospitality venues in South Sydney.

Spokesman for the group, Chris Feros, said "The Lone Pine is an impressive asset which continues to grow but our groups resources are focused on the new projects and we appreciate that there are operators better suited to optimizing this business then we are."

"A few hotels on large sites with development potential seem to have transacted this year including the Kings Head Tavern in Hurstville and the Penshurst Hotel which augurs pretty well for the Lone Pine on 10,000sqm next a train station." suggested Mr Feros.

The offering comes at a time when Redcape shareholders, York Capital and Varde Partners, continue to explore their exit options either via trade sale or IPO. Varde Partners are said to be so enamoured with the lucrative hotel asset class in Sydney that they are mooted to have recently formed offshoot group Monarch Hotels as a separate investment vehicle, having quickly moved to acquire the gaming-centric Belmore Hotel and Banksia Hotels for over $45 milion.

The highly successful reopening of the Newport Arms Hotel, rapid expansion of the Public House Group and rapacious nature of the Urban Purveyor Group are further evidence that hotel cash flows are not just seemingly quarantined from general business sentiment, but are actually expanding precipitously with improved product and service offerings, often reflecting the latest international dining and hospitality movements.

Award-winning watering hole The Dove & Olive Hotel in Surry Hills is also currently being offered for sale as owners, The Good Beer Company, embark on major renovation plans at their newly acquired Duke of Gloucester Hotel in Randwick.

"The customer experience in Sydney hotels has improved markedly in recent years and with residential densities intensifying, particularly around main public transport nodes, and continued high barriers to entry, it stands to reason that these businesses are becoming more valuable." stated Mr Musca.