The Padstow Hotel was sold by Coles to the John Feros led JDA Hotel Group in 2014 and has, since December 2017, enjoyed approval for extended trading hours from 12 midnight to 2am. Currently ranked 169 in the State’s top 200 gaming rankings, the hotel is set to benefit greatly from its extended hours, complemented by its close proximity to the increasingly busy Padstow train station. 

JDA Director John Feros confirmed the recent approval was a very positive bonus for his large format business.

“In the past 12 months we have spent considerably in terms of cap ex so as to position the business in anticipation of the extending trading hours and clear development growth in the area” said Feros.

“We simply found that our patron numbers at 12 midnight were still very meaningful, and the ability to retain and grow this business by virtue of greater trading flexibility is historically a strong enabler for the profitability of hospitality businesses such as the Padstow Hotel” Feros concluded.

Having recently sold several key gaming hotel offerings in Sydney’s South and South West, including the Banksia Hotel, Allawah Hotel, Peakhurst Hotel and the Coolibah Hotel in Sydney's Merrylands, Jolliffe is well placed to comment on the strength and depth of the market for similar assets.

“Indisputably, the appetite for well positioned hotels underpinned by reliable gaming revenues and situated on sizeable commercial property holdings remains unsatisfied” said Jolliffe.

“The Padstow Hotel represent a 2,723sqm land holding, adjacent a major Sydney train station and promotes a quality and robustness of cash flow that can only be achieved when the full mix of departmental revenue is levered in the way the Padstow Hotel has been recently repositioned" advised Jolliffe.

"The Padstow Hotel extracts its enviable profitability from only 20 electronic gaming devices, meaning that not only the additional 2hrs of peak trade permitted by the recent trading extension approval, but also the possibility of additional machines within the permissible laws, confirms the scalability of the hotel's current profitability. This last point is critical in terms of astute purchaser’s check list for this type of opportunity, ensuring there’s the genuine potential for sustainable and very achievable growth within the silo of this single investment” concluded Jolliffe.

Similarly credentialed hotels have sold in the 25m to 45m price bracket, and have typically sold at around an 8% yield, such as those sold recently by Andrew Jolliffe listed in the below table.

Like the Tennyson Hotel, which has statistically risen in terms of gaming performance since its acquisition by Justin Hemmes' Merivale Group, the Padstow Hotel will be publicly auctioned.

“Our company history, and that of the fabric of the culture within this organisation, promotes the virtues and transparency of the auction room environment” said Jolliffe.

“In addition the nature of our client, being a unlisted trust operating within an investment timeframe like a typical private equity vehicle, means the deliberate nature and uncomplicated process espoused by an auction campaign is embraced. To this end, we proudly enjoy a commercial property auction clearance rate well in excess of 80%, which confirms our long held view that both buyers and sellers feel an attraction to this form of sale” concluded Jolliffe.

Jolliffe was recently announced the number one agent globally for the 1000 office Ray White Group, Australia’s largest real estate group with over 45bn in annual revenues. Click here to read more about this award.

The auction of the Padstow Hotel will take place on Wednesday 21 March in Sydney.

Click here to view Andrew Jolliffe's profile on The Hotel Conversation.

To discuss the sale in further detail contact Andrew Jolliffe or Blake Edwards of Ray White Hotels via the below contact details.

See other articles relating to Andrew Jolliffe below:

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Justin Hemmes adds the Tennyson Hotel to his empire

Justin Hemmes led Merivale buys another Sydney Eastern Suburbs hotel

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