As the year seemingly draws to a close JLL Hotels & Hospitality Group has today announced the sale of the Edinburgh Castle Hotel in Sydney’s CBD.

Standing prominently on the corner of Pitt and Bathurst Street, ‘The Eddy’ as it’s affectionately known was brought to market by JLL for the first time in over 20 years on behalf of its private owners.

With sound tenant covenant in Solotel, known for other high-profile venues including the Golden Sheaf Hotel in Double Bay and world class restaurant Aria on Sydney Harbour among others, coupled with a near term lease expiry (Jan 2025), JLL said the campaign generated over 85 enquiries from a wide-ranging investor set around the country including hoteliers, value-add investment funds, high net worth investors and family offices. 

JLL Hotel Managing Director, Ben McDonald, Senior Vice President Kate MacDonald and JLL Capital Markets Senior Director James Aroney were responsible for steering the sale campaign which achieved a sale result reflecting a 3.2% cap rate on the passing income.

Mr McDonald highlighted the quality of the asset along with the diminishing availability of freehold hotels in the CBD as key factors in achieving the strong result.

He noted; “Pubs continue to feature prominently as part of the ‘alternative’ real estate asset class and this result highlights the ongoing appetite and appeal of the sector to a growing audience.”

Ms MacDonald also pointed to the enormous trading opportunity and the chance to re-staple the freehold and leasehold interests to create a freehold going concern operation for the first time in decades.

“With Sydney CBD’s first Build-to-Rent project and the recent opening of the South Pitt Street Metro Station literally adjacent to the hotel, the trading profile of the business is set to explode in the near term, and we wish the purchaser every success in the future.” 

The purchaser has been identified as Sydney’s Good Beer Company who will add the hotel to its portfolio of pub assets.

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