Fancy a chicken parmigiana or maybe a steak sandwich at your local pub? And what if you were to pair that with a schooner or perhaps an Aperol Spritz?
Prepare to shell out the most for your pub food in Victoria according to CBRE’s Pub Grub indices, which provides a quirky but insightful snapshot of pub dining and drinking trends across Australia’s eastern states.
F&B and the role it plays in successful pub operations is just one of the areas explored in CBRE’s new ‘Raising the Bar – Investment & Innovation in Australian Pubs’ report.
The country’s fragmented but resilient pub landscape, the way in which population shifts are driving interest in regional pubs, and the recent rebound in transaction activity is also up for discussion as is the sector’s challenges, risks, and future state.
CBRE Research Analyst Katya Ezhova said: “As interest rates stabilise and cap rates compress, investor demand – particularly from institutional and syndicate-backed buyers – is poised to support modest uplifts in asset values, especially for venues with strong gaming entitlements and redevelopment potential.”
CBRE Senior Director, Hotel Valuations Kire Georgievski said increased appetite from traditional bank lenders – particularly for assets with strong gaming entitlements and consistent cash flows – was adding further momentum to the sector.
“This resurgence in credit availability is enabling more competitive bidding, especially among private investors and syndicates, and is helping to underpin valuations,” Georgievski said.
CBRE collected data from 105 pubs across NSW, Victoria and Queensland to produce the indices, focusing on old-school pub staples that have made a gourmet comeback.
Victoria emerged as the most expensive state overall, highlighting the state’s strong dining culture and willingness to pay for elevated pub classics. NSW came a close second, with Queensland remaining more affordable, supported by greater price sensitivity.
Ezhova said the highest-priced venues were typically those that had undergone significant refurbishments in recent times, suggesting a correlation between capital investment and premium menu pricing.
Pub outlook – current challenges
The report identifies labour shortages in regional Australia, changing consumer preferences, rising living costs, margin compression and regulatory risk as some of the key challenges.
“Consumer preferences are shifting toward flexible, experience-led venues, challenging traditional pub models. Without adapting to evolving expectations, pubs risk misalignment between their offerings and what modern patrons value; atmosphere, events and personalised service,” Ezhova said.
On the regulatory front, cashless gaming reforms were identified as a key area of focus.
“Uncertainty around regulatory implementation timelines and compliance costs is dampening confidence in the pub sector, particularly in NSW, where investor sentiment has turned increasingly negative. This adds another layer of risk to an already pressured operating environment,” Georgievski noted.
Fragmented yet resilient landscape
Pubs with between five and 19 employees dominate the market nationally, representing 28.3% of all businesses. This points to a sector built on mid-sized venues – large enough to offer diverse services such as food, entertainment and gaming, while remaining locally grounded and responsive to community needs.
Owner-operated pubs account for 27.8% of the market, highlighting the sector’s grassroots character, with large-scale venues (200+ employees) accounting for just 0.4% of the market.
“This fragmentation contributes to the sector’s resilience and diversity, but also presents challenges for scalability, standardisation and uniform policy implementation,” Ezhova said.
Urban shift drives sales growth
Regional population growth surged in 2023–24, marking one of the strongest years in a decade, driven by urban decentralisation and lifestyle relocations.
“As Australians flock to regional hotspots like coastal NSW, South East Queensland and regional Victora, local pubs are seeing a rise in patronage,” said Georgievski.
:Domestic tourism is another driver and pubs which align with tourism strategies, such as those on pub trails, near natural attractions or offering boutique experiences, are especially well-positioned to capture visitor spending.”