2019 was a year of mixed market dynamics and national trading profiles for the pub sector. Whilst the market was slower out of the blocks (y-o-y) in the lead up to the Federal Election, the Liberal victory provided the necessary confidence to turn market sentiment and ignite transactional activity through the back end of the year.
With the Banking Royal Commission safely in the rear view mirror and the cash rate holding at record low levels, 2020 is expected to deliver solid investor interest in the sector. Investment will be driven by the country’s eastern states and underpinned by heightened debt liquidity and new corporate capital in the market.
Some of the key highlights include:
- Established and larger scale operators will continue to expand their portfolios via ‘bolt-on’ acquisitions.
- Victoria will continue to benefit from strong demand drivers, with buoyant interstate demand and regulatory stability underpinning asset values.
- Demand for A-grade Freehold Going Concern venues is expected to strengthen, and likely to result in further yield compression.
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Research Manager - CBRE Hotels
Head of Hotels Research