Widely considered the greatest hotel in Australia, JLL Hotels & Hospitality Group are taking the famous Oaks, Neutral Bay to market for the first time ever by Expressions of Interest. The national icon is being offered by private owners of 50 years – the Thomas family – with patriarch David ‘Taffy’ Thomas ready to pass custodianship of this remarkable asset to the next generational owner.

The family’s ownership of the hotel commenced in 1975 when David acquired the leasehold interest in the hotel, with support from his mother Alala, from Tooth & Co. They have lovingly and meticulously expanded and grown the landmark over nearly 50 years of family operation. Idolised for the famous beer garden and 80-year-old English Oak tree, the venue today represents one of the largest multifaceted hotels in the country. The hotel remains the drinking establishment of choice for many famous identities and sports stars and houses the John Meillon OBE Bar, named after the renowned actor.

The Oaks also resides on a prominent 2,188sqm site with an ideal B4 Mixed Use zoning and favorable planning guidelines allowing for up to a 5-storey development (STCA), highlighting the significant value-add potential of the asset. The venue includes Taffy’s Sports Bar, Alala’s Cocktail Bar, Bar & Grill Restaurant, famous large beer garden, gaming room with 30 poker machines, extensive first floor function spaces and high-end retail bottle shop.

JLL Managing Director John Musca suggested, “As in all real estate sectors the premier assets often only come to market once in a lifetime, which is even more prevalent in the highly protected hotel industry where assets of this scale and quality will simply never be approved or replicated again in high-end Sydney demographic locations – we’re fundamentally talking about one of the very best hotels in the asset class”.

Unlike other asset-classes that have seen cost of debt slow market momentum, the hotel market has continued unabated with nearly $2 billion of capital flowing into the sector in the past 12 months and trade rebounding strongly from initial COVID-19 challenges. The flight to scale is increasingly competitive from both institutional and private owners across the country, with levels of liquidity at unprecedented levels. This has been catalytic to the largest exodus of generational hotel owners in nearly 3 decades with over 50% of the last 20 transactions in the Sydney metropolitan area representing generational owners exiting the industry. With a lack of succession options, increasing growth of the larger hotel groups and quality asset supply tightness, individual private family operators have slowly been exiting across the country.

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More recently the asset class has witnessed an escalation of family office and non-traditional investor involvement nationally, typically with the support of experienced pub operators. The Smorgan family’s recent acquisition of the Continental Hotel in Sorrento, the Fairfax family’s Sydney pub portfolio and ASX listed Johns Lyng Group (ASX:JLG) CEO Scott Didier’s recent purchase of the Great Northern Hotel Byron Bay, are all examples.

“For those that accumulated wealth in mining, media, software, logistics or any other sector, once you finalise a business case, owning an iconic pub hotel in reality is far more fulfilling and exciting than any other form of investment”, Mr Musca suggested.

JLL Senior Vice President Ben McDonald proffered, “It is difficult to imagine any hotel in the country evoking as much emotion, brand heritage and rites of passage than the illustrious Oaks Hotel. It’s going to be a remarkably fulfilling asset for the next lucky generational owners”.

With substantial cashflows and a valuable underlying landholding the class-leading Oaks is expected to generate interest over $175 million with the sale set to be the largest hotel sale ever transacted in the pub asset class nationally.  

Family representative Andrew Thomas said, “On the back of a spate of unsolicited approaches it just feels like the right time for the family to move on and we’ll leave the Oaks with fond memories and many friends… It holds a very special place in the Australian hotel landscape, and we look forward to seeing its next incarnation under the new custodians.”

The family will remain committed industry stakeholders with their ongoing ownership of the Winston Hills Hotel and The Entrance Hotel.

Expressions of interest will close at 4pm AEST on Tuesday 6th September 2022.

To request a copy of the Information Memorandum please contact one of the marketing agents JLL Hotels & Hospitality Group JLL Managing Director John Musca and JLL Senior Vice President Ben McDonald, via the contact details below.

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