Prime retail investment with long WALE to national hotelier

Melbourne, 30 October 2019 - A landmark on Port Melbourne’s Bay Street, The Exchange Hotel, has been listed for sale through CBRE.

Mathew George and Scott Callow of CBRE Hotels, together with Rorey James, Mark Wizel and JJ Heng of CBRE Melbourne Strip Retail Investments have been appointed to sell freehold investment of The Exchange Hotel on behalf of a private owner.

Formerly home to Molly Blooms, the property has operated as a pub for over a century.

The 39 Bay Street property, located on the corner of Bay Street and Rouse Street, is offered on a WALE of close to seven years and comes with street-side dining and a 3am general (late night) license attached.

The two-story building is fully leased to the Australian Venue Co (AVC), which operates approximately 150 venues across Australia and New Zealand, employing around 4,500 people.

Through the backing of global investment firm KKR, AVC earlier this year acquired the Coles pubs operations in Queensland and South Australia.

The Exchange hotel is being sold with almost seven years to AVC remaining on their current term, providing annuity income, a 6-month bank guarantee and rental growth through to April 2026 with an additional 5x5 year options taking the lease term to 2051 with all options.

“The freeholds of high-quality pubs positioned on main roads are always tightly held because they represent such unique value,” Mr George, CBRE Hotels Melbourne Director commented.

“An opportunity like this with annual growth, a national tenant, bankable security and long WALE (almost seven years) represents investors an exciting alternative to shares or low yielding term deposits – currently hovering between 1.5% - 1.8%.”

“The anticipated yield range of over 5% should attract strong interest from both domestic and international buyers wanting to secure a famous Port Melbourne corner property with a very solid national tenant and the multiple future development options offered by mixed-use zoning,” Mr James, CBRE Melbourne’s Strip Retail Director noted.

“Having sold the vast majority of Bay Street property presented to the market over the last two years, we have seen continued interest in the Port Melbourne retail investment market as capital continues to flow into the commercial sector from alternative investments given stable market conditions.”

About CBRE Group, Inc.

CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2018 revenue). The company has more than 90,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 480 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.