Peak Investments, headed by influential fund syndicator Damian Kelly has acquired a top Surry Hills gaming pub for $26.1 million.
 
The Crown Hotel was sold by the Ray White Group's  Number 1 agent internally, Andrew Jolliffe, in conjunction with Daniel Dragicevich of CBRE on behalf of ASX listed Lantern Hotels, with this transaction representing the final pub sale in Lantern Hotels' well publicised repositioning and divestment strategy. 
 
Lantern Hotels undertook significant board and management changes some 18 months ago, which resulted in a strategic review and consequent staged sell down of the 16 non- core and core pub assets.
 
The expansive four level Victorian hotel is strategically situated on the corner of Crown and Cleveland Streets in Surry Hills. It holds a 24 hour liquor licence with rare 3 hour gaming shutdown and 30 gaming machines. 
 
“We’ve been privileged to be heavily involved in Lantern Hotels divestment program with the Crown Hotel sale bringing to a close what has been a very successful outcome for the shareholders”.
 
“Peak Investments have been strategic in their selective investment approach following their entrance to the NSW market two years ago with the purchase of the Rose & Crown Hotel in Parramatta. This private funds management style of purchaser is becoming more and more prevalent in the current climate and provides genuine competition for the traditional pub families when quality assets are put to market”
 
This sale follows a record 12 months for the Sydney pub sector with more than $550 million in deals being concluded with the final three months of 2016 and the beginning of 2017 particularly bullish seeing 13 top gaming hotels sell – a frequency of transactions never seen before.

Speaking to the considerable transaction activity of the past 12 months, Asia Pacific Director of Hotels Andrew Jolliffe is confident of a continuation of the positive theme. "In terms of transaction trends, the key market indicator we view as continuing is yield contraction for A-Grade freehold hotel assets. We participated in numerous transactions during the back half of 2016 at yields averaging 8.5% for hospitality properties of this nature, and subject to the continued availability of well-priced senior debt, we can see an argument for a further 50 to 100 basis point yield contraction for irreplaceable freehold assets" Jolliffe advised.
 
"Petrol prices at the pump sub $1.50 per litre, the $AUD sub 75 US cents per dollar, senior debt priced at/or below 4.5% including margin and industry indexed consumer spending at existing levels all suggests to us some continuity and reliability around the current internal and external investor sentiment regarding the asset class. Fundamentally, the majority of assets are underpinned by property, gaming inventory or both; and whilst-ever high level market receptors such as those referred to above maintain a tight band width regarding recent trends, we are confident astute investors and operators will assess the opportunity as, if not more positively, than has been the case over the past 24 months" proffered Jolliffe.

For more information please contact the below sales agents.

See also:

Crown Hotel in Surry Hills For Sale by Ray White Hotels and CBRE Hotels

Get to know Andrew Jolliffe - Director APAC, Ray White Hotels