Brisbane pub the Royal Exchange Hotel, positioned in prime city fringe location, is on the market. Burgess Rawson and HTL Property are set to auction the iconic property, located in the river suburb of Toowong.
With a long-term triple net lease to Endeavour Group (ASX:EDV) until 2068 (including options); the popular Brisbane pub is set across 2453sqm of very valuable commercial property, and includes a busy on-site BWS with three further detached bottle shop licenses, plus one of the State’s most famous beer gardens and sports bar.
“The Royal Exchange Hotel is a highly regarded suburban hotel operation and the stability offered by having the nation’s largest hoteliers as its listed tenants is a compelling proposition” said HTL Property Director Glenn Price.
With the national market having set an FY21 record at $1.5bnillion in sales, investment grade opportunities with covenants the quality of Endeavour Group have been seldom offered. However when they have, as was the case earlier this year in the form of the successful sale of Queensland’s Pelican Waters Hotel, Edinburgh Castle Hotel, Kedron Park Hotel and The Noosa Reef Hotel; the results have illustrated the willingness of the market to secure high grade opportunities.
“The most recent transactional evidence in the form of the sale of both Queensland and Victorian based assets divested by ALE, has delivered a blended yield of 4.4%,” said Michael Gilbert of Burgess Rawson.
“In terms of this asset class, the unparalleled nature of the tenant, the scarcity of investment grade acquisition opportunities; and the undisputed quality of the Brisbane hotel being sold indicate to us a replication of keen interest is expected.”
Offering a 25 year triple net* lease to 2028 with 4 x 10 year options to 2068 and a current net income of $562,715; The Royal Exchange Hotel enjoys close proximity to the Brisbane CBD and Southbank precinct.
The famed Brisbane pub will be auctioned at Melbourne’s Crown Casino and other virtual locations on Wednesday, August 4, 2021.