The Exchange Hotel in Port Melbourne will go under the hammer this Friday following a month-long sales campaign.

Formerly home to Molly Blooms, the property has operated as a pub for over a century.

The two-story building is fully leased to the Australian Venue Co (AVC), which operates approximately 150 venues across Australia and New Zealand, employing around 4,500 people.

Through the backing of global investment firm KKR, AVC earlier this year acquired the Coles pubs operations in Queensland and South Australia.

The Exchange hotel is being sold with almost seven years to AVC remaining on their current term, providing annuity income, a 6-month bank guarantee and rental growth through to April 2026 with an additional 5x5 year options taking the lease term to 2051 with all options.

Situated at 39 Bay Street, the corner site is offered on a WALE of close to seven years and comes with street-side dining and a 3am general (late night) license attached.

Mathew George and Scott Callow of CBRE Hotels, together with Rorey James, Mark Wizel and JJ Heng of CBRE Melbourne Strip Retail Investments were appointed to sell freehold investment of The Exchange Hotel on behalf of a private owner.

Mr George said the freeholds of high-quality pubs positioned on main roads were always tightly held because they represent such unique value.

“An opportunity like this with annual growth, a national tenant, bankable security and long WALE (almost seven years) presents investors with an exciting alternative to shares or low-yielding term deposits – currently hovering between 1.5 - 1.8 per cent," he said.

Mr James said the yield range of more than five per cent should attract strong interest from domestic and international buyers.

“It's an opportunity to secure a famous Port Melbourne corner property with a very solid national tenant and the multiple future development options offered by mixed-use zoning,” he said.

“Having sold the vast majority of Bay Street property presented to the market over the last two years, we have seen continued interest in the Port Melbourne retail investment market as capital continues to flow into the commercial sector from alternative investments given stable market conditions.”

The Exchange Hotel will be sold by public onsite auction on Friday, November 29 at 1pm.

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