Exclusive comments from Peter Power of Power Jeffrey & Co, and Paul Fraser of CBRE Hotels, have detailed the strong interest from Victoria and New South Wales riding the wave of the recent pub boom.

Peter Power has advised of an increase in enquiry from NSW hoteliers who rode the recent boom in pub values in NSW, particularly Sydney.

"These hoteliers are now seeking better opportunities in Queensland to purchase on yields circa 10% to 14% (dependent on location), compared to sub 10% in Sydney and surrounds."

Mr Power, having transacted $23 million worth of pubs in the past 6 months, along with Mr Fraser having several assets under contract awaiting settlement, expect this trend to continue.

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Peter Power of Power Jeffrey & Co

"Interstate buyers are certainly chasing stock with a firm focus on SEQ and value buying in major regional areas such as Gladstone and Mackay."

Looking ahead to 2019, Mr Power comments, "We expect strong enquiry in 2019 for well located hotels with strong balanced revenue streams. The industry is well placed to attract ongoing buyer interest from local & interstate buyers assuming future stable interest rate and regulatory environments."

Click here to view the Power Jeffrey & Co profile on The Hotel Page.

Adding to this, Mr Fraser states, "The ability of stock will continue to constrain transactional volume, most predominantly in SEQ. Demand outstrips supply for Queensland as a whole. I do believe however the more astute buyers will look at value propositions in areas that are deemed counter cyclical buying."

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Paul Fraser, CBRE Hotels Director of Pubs

"Ability to source debt will also remain tough for the short to medium term with many buyers looking at alternate funding options through funds/ mezzanine funding arrangements."

"Overseas buyers in the pub sector are relatively subdued with access to capital from China becoming restrained." 

With upcoming marketing campaigns in Emerald and Toowoomba, Mr Power is seeing evidence of Pub buyers becoming more sophisticated & market savvy in their pursuit of a suitable hotel acquisition.

"Buyers have extensive research avenues available to them including various social media outlets, government database resources & specific onsite financial & property due diligence. We are experiencing strong demand for pubs in the SE corner, coastal provincial areas & mining based localities."

Mr Fraser currently has listed on the market The Commercial, Redbank hotel, an asset he notes is a very strong performing gaming pub in the middle of gaming heartland.

Click here to view the CBRE Hotels profile on The Hotel Page.

"This asset has immediate obvious upside and would provide an astute operator with a large foothold in one of Queensland’s highest performing gaming LGA’s. This Hotel has very obvious immediate upside and would be a long term consistent performing for someone looking at getting a foothold into SEQ."

To discuss the Queensland pub market in further detail, phone or email Peter Power or Paul Fraser via the below contact details.

See also:

Gold Coast shines as Australia's top hotel market for 2018 - CBRE Hotels report

Travelodge Rockhampton hotel sold to Chinese investor after a spate of regional Queensland hospitality sales

New global luxury hotel brands to grow SEQ into a star-studded destination