The sale is the result of a six week international EOI campaign launched in March of this year.

Bruce Solomon “Solotel is delighted to add to the Marlborough Hotel to the existing four Hotels we manage in the Newtown area. Solotel will be by the end of this year operating over 30 hospitality businesses in Sydney and Brisbane”

Exclusive agent for the sale of the hotel, Ray White's Asia Pacific Director Andrew Jolliffe, advised that the sale of the hotel followed significant local and international interest.

"Ultimately, and as we have often experienced, it was expert domestic knowledge in the form of the well-known hospitality management company Solotel, which prevailed above wide interest in order to secure this generational piece of hospitality property." "However it should also be said that the level of international interest was significant; and is reflective of material off-shore equity tranches looking for a home in high yielding Australian property investments with exposure to management functions, and business operation" commented Jolliffe.

The sale of the Marlborough Hotel by the Australian Pub Fund represents the fifth successful sale in as many months for the unlisted group. Following the sale of the Marlborough, the Australian Pub Fund will have five pubs, three in Sydney; Kinselas in Darlinghurst, Unity Hall in Balmain and the Vic on the Park in Marrickville and two in Brisbane; the Stock Exchange and Elephant Arms.

"Consistent with our strategic objectives, we have divested a number of pubs where we feel the price the market has offered reflects the value of our assets. We will continue to apply this strategy where applicable. Our strategy of buying the best pub assets within each local market area has attracted experienced buyers to pursue the acquisition of our assets " commented Matthew Beach director of APF.

"The Marlborough was a unique proposition given both its sheer scale, and proximity to both Sydney University and RPA Hospital" added APF CEO Andrew Gibbs. "The large footprint the hotel adorns, complete with multiple outdoor areas and 30 very valuable gaming machines, enabled us to significantly grow the earnings of the pub during our ownership period" added Gibbs.

The acquisition by a Solotel managed company comes not long after its takeover of the Clovelly Hotel; clearly cementing the group as one of the key players in the national hospitality landscape. Separately, the sale continues the considerable momentum the national hotel asset class has enjoyed over the past 24 months; typified by the hugely successful strategic sell down programs of both ASX listed Lantern Hotels, and the Australian Pub Fund respectively.

Preferred agent for both sale processes, Andrew Jolliffe, believes a new class of freehold hotel has begun to appear in the form of Super A Grade hotels.

"Amongst a number of others, over the past 6 months we have sold 6 landmark freehold hospitality properties we believe can be distinctly classified as Super A Grade hotels; and accordingly, which bear an amalgam of unique characteristics such as prominent locations, significant, and high quality commercial property sqm coverage. Often adjacent major transport centres and other key drivers of patronage such as universities, shopping centers and major residential development.

In addition to the strong property fundamentals referred to above, acquirers of Super A Grade hotels seek exposure to business models which enjoy multiple revenue streams, preferably incorporating the ownership and operation of gaming devices, and with both heritage and evidence of deep historical revenue generation" commented Jolliffe.

Jolliffe would not be drawn on the price paid for the Marlborough Hotel, other than to confirm the successful sale price achieved was entirely consistent with the guidance provided throughout and before the EOI divestment program.

"We have approximately $125m worth of other Super A Grade hotel assets currently under agreement nationally, and consequently can see well beyond 2017 in terms of positive runway and a compelling investment argument to support longevity in terms of demand for this asset class" concluded Jolliffe.

See also:

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

Justin Hemmes adds the Tennyson Hotel to his empire