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News release

Sydney

Goodstone Hotel Group to be sold


Sydney, 17th March 2010 - Jones Lang LaSalle Hotels are delighted to announce that they have been appointed exclusive agents to offer the Goodstone Hotel Group in Tasmania for sale by National Expressions of Interest closing 13 May 2010.

With assets strategically located in the north-west of the state the group includes 10 freehold going concern hotels, 1 leasehold hotel, a large freehold night club and bar complex, two freehold liquor barns and a DA approved freestanding liquor barn site and the Big Bargain liquor buying and marketing group.

Jones Lang LaSalle Hotels National Director of Pub Investment John Musca, suggested that “this is the most significant retail liquor and gaming market share opportunity to be made available to the Australian investment marketplace since Lasseters Hotel and Taverns Group in 2007. Furthermore it is a first time opportunity to secure the largest independent liquor retailer in the marketplace and a portfolio of gaming hotels that include five Top 30 statewide gaming venues, in one competitive acquisition in Tasmania”.

Six of the Goodstone Group hotels generate over $50,000 per week in average weekly retail sales, with the group generating in excess of $30 million of off-premise liquor sales annually, making it a significant player in the off-premise liquor market in Tasmania.

Established in 1988 with the acquisition of what is now known as the Lighthouse Hotel, the group comprises over 60,000sqm of freehold hotel sites with significant value-add development potential. In addition the group includes 325 gaming machines representing 14% of all gaming machines in Tasmania.

“Tasmania has continued to fair well both throughout and post the global economic crisis, particularly market-dominant strategically located businesses such as these”, said Mathew George, Jones Lang LaSalle Hotels, Vice President.

The sale of previous hotel portfolios including the Taverner Hotel Group, the Lion-Nathan Hotel Group, the Lasseters Hotel Group and the Munday Hotel Group in Queensland and South Australia have seen significant trading upsides realised by both listed and private suitors including Woolworths and the IPG group. The current sale of the Munday Hotel Group in Victoria is understood to be keenly contested with 5 offers for the portfolio being reviewed currently.

“Furthermore the Federal Group monopoly on operation of gaming licences in Tasmania expires in 2018, which will no doubt see the gaming tax model move in line with the rest of the country. This will see significant increases in return to operators and offers tangible earnings uplift to astute investors in the space”, said Mr Musca.

The Big Bargain Liquor Group with 50 members statewide has grown to be one of the marketing success stories of the liquor category in Tasmania since its inception in late 2003. The Liquor marketing group, along with Goodstones freehold hotel assets and development sites, offer substantial spin-off opportunities for the private equity and capital markets.

“The venues offer significant gaming upside with the development of more effective smoking solutions for the gaming rooms, CAPEX upgrades, and site maximisation strategies”, Mr Musca said. 

The private owners of the Goodstone Group are known to have fielded numerous offers for the portfolio recently and after 22 years in the industry have decided to exit to pursue personal interests.