Hotel Property Investments lists Mount Gambier tavern for sale

Melbourne, 28 October 2014 – The Western Tavern in Mount Gambier has been listed for sale by listed fund Hotel Property Investments.

Located at 178 Jubilee Highway West, the Western Tavern comprises a modern gaming tavern with 33 gaming machines, bistro dining, sports bar and drive through ‘Liquorland’ bottle shop. The hotel benefits from high exposure to passing traffic on the main road heading into the township of Mount Gambier.

CBRE Hotels’ Joseph Du Rieu and Scott Callow have been appointed as the exclusive agents for the sale by Hotel Property Investments (HPI). HPI has a portfolio of 50 properties, all of which are leased to Wesfarmers Ltd subsidiary Liquourland. The sale of the Western Tavern follows HPI’s acquisition of the Beenleigh Tavern in Brisbane and a recent $25 million equity raising, combined with a decision to focus on significant assets in capital cities with investment grade lease covenants.

Mr Du Rieu said the Western Tavern was being offered subject to a highly attractive, long term lease to Liquorland, with approximately 13 years remaining, and two additional options to extend the term by ten years each. Incoming purchasers will have the benefit of four per cent annual increases. The tavern has a net income of approximately $492,000, underpinned by a strong gaming room business, and backed by the current lease to Liquorland owner Wesfarmers Ltd; an ASX listed top ten company with a market capitalization of $48.5 billion.

Mr Du Rieu said; “The market has not seen a standalone freehold investment of this quality with such a strong covenant for some time. Given the current pent up buyer demand and the attractiveness of the AAA lease covenant, we expect the Western Tavern will appeal to a broad spectrum of investors nationally.”

Mr Callow added; “The pub investment market continues to exhibit yield compression for properties with strong leases, and where the underlying business is supported by a full complement of gaming machines.”

The hotel is for sale via a Public Expressions of Interest campaign, due to close 3rd December 2014.

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