HPI & Australian Venue Co acquire six Queensland pubs

May 28, 2021
By Ioni Doherty

Hotel Property Investments (HPI) and its tenant Australian Venue Co (AVC) have joined forces, purchasing another six Queensland pubs to the tune of $32.7 million.

The agreement between the two businesses sees HPI acquire the pub freehold while AVC buys the business, its tenure secured by a long-term lease.

The six properties include a weighted yield of 7.75 per cent and AVC’s tenancies have an initial term of 20 years from the acquisition date.

The six venues are Surf Air Hotel for $10.45m (pictured below) with the five remaining properties contracted to settle in June: Commonwealth Hotel, Clermont ($3.06m), Grand Hotel, Clermont ($2.78m), Capella Hotel, Capella ($3.34m), Commonwealth Hotel, Roma ($9.78m), White Bull Tavern, Roma ($3.25m)

“The acquisition of these assets demonstrates HPI’s strong relationship with AVC and our ability to transact efficiently to the benefit of all parties,” said HPI CEO, Don Smith (pictured above to left with AVC CEO, Paul Waterson).

The listed pub landlord is nearing a $1 billion property portfolio. Their half yearly results showed 47 pubs on the cards for a value of $850 million. HPI has acquired a further seven properties since then.

Hotel Property Investments (HPI) and its tenant Australian Venue Co (AVC) have partnered, purchasing another six pubs. ASX listed HPI announced the $32.7 million outlay on Monday.

The agreement sees HPI acquire the pub freehold while AVC buys the business, its tenure secured by a long-term lease.

The six Queensland properties include a weighted yield of 7.75 per cent and AVC’s tenancy have an initial term of 20 years from the acquisition date.

The six venues are Surf Air Hotel for $10.45m with the five remaining properties contracted to settle in June: Commonwealth Hotel, Clermont ($3.06m), Grand Hotel, Clermont ($2.78m), Capella Hotel, Capella ($3.34m), Commonwealth Hotel, Roma ($9.78m), White Bull Tavern, Roma ($3.25m)

“The acquisition of these assets demonstrates HPI’s strong relationship with AVC and our ability to transact efficiently to the benefit of all parties,” said HPI CEO, Don Smith.

The listed pub landlord is nearing a $1 billion property portfolio. Their half yearly results showed 47 pubs on the cards for a value of $850 million. HPI has acquired a further seven properties since then.

Smith told the AFR that AVC has been scouting acquisition opportunities in a partnership that now encompasses almost 50 hotels.

He said: “We’ve bought a few like this and from where where we sit, it’s a pretty slick process now.

“AVC take the lead and establish the supportable earnings out of the pub then they tell us what rent they’ll pay, we’ll put a cap rate on it and and that’ll give a value for the property.”

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