HTL Property anticipates sales in the NSW pub market will hit an all-time high when investors and punters exit lockdown next month.
Its NSW Pub Market – The Road Post Lockdown report points to “shape-shifting events” during September, with the proposed delisting of both Redcape Hotel Group and ALE Property Group, which involve $3billion worth of pub assets.
Redcape has flagged its interest in expanding further into Queensland, with The Australian recently noting that “some gaming pubs in NSW may be unlocked by a combination of high prices and owners looking to exit as other parts of their operations come under stress”.
Meanwhile, property funds company Charter Hall is set to become the largest pub landlord in the country through a $1.7billion takeover offer for ALE Property Group.
Andrew Jolliffe (above), HTL Property Managing Director, said: “At October’s impending completion of the current travel restrictions, the traditional hotel market will be enlivened by a volume of transactional activity greater than that at any other chronological juncture.”
According to the HTL report, most property markets found themselves in an opaque state of uncertainty during the onset of COVID-19, which saw the majority of both buyers and sellers adopt a ‘wait and see’ holding pattern type attitude.
“However moving into 2021, we have seen substantial shifts in the levels of market confidence, spearheading a robust increase in both demand and transactional activity,” the report notes.
HTL Property’s recent analysis has highlighted that during the first lockdown there existed very few transactions recorded, with high value Metropolitan assets dominating the landscape. Even post lockdown and with restrictions easing from June 1, 2020, the agent saw very few sales occur; aside from regional transactions in the sub $10million price point.
“As we entered 2021, the post lockdown world revelled in an environment where trade was up, many businesses had returned to work, employment rates looked favourable; and commercial sales activity across the country had rebounded in earnest,” it adds.
“For the traditional pub market, this was no different; and the weight of funds orbiting the marketplace were enabled by both
first and second tier lenders, making investment in the asset class more accessible than ever before. In early 2021 we posted record levels of sales transactions, with the first six months of the year recording $596.5million across 49 unique transactions.
“In fact, this continuing momentum has not been stifled by the lockdown announced on 26 June 2021; and remains allergic to inertia despite the current cessation of trade continuing through to the current period. On the contrary, transaction levels have exceeded all expectations.”