Pub mogul Justin Hemmes has been officially declared a billionaire by the 2019 Financial Review Rich List.
This year’s list includes a record 91 billionaires, with Hemmes coming in at No.88 with an estimated wealth of $1.06billion.
The AFR reports: “Justin Hemmes becomes a billionaire as his Merivale Group continues to build its pub, hotel and restaurant portfolio. Merivale’s major acquisitions in 2018 were the Royal Hotel in Bondi for $30 million and the George Street site adjacent to his Ivy for $80 million. The new acquisitions bring the value of Hemmes’ diverse range of Sydney venues to an estimated $600 million. Venues under Merivale continue to perform successfully, as the group increased its revenues by $50 million for 2018.”
Hemmes was just 24 when he pitched the concept of Establishment to his parents in 1998. They were sold on the idea and bought the George Street site for $9 million. It’s now estimated to be worth hundreds of millions.
Hemmes told the AFR in an interview that he doesn’t see himself as an investor or property developer, but as being in the business of making people feel good.
“Everyone has tough lives, unfortunately, and you need escapism, you need a lift. Hospitality and socialising is the number-one escape,” he said. “People are coming to us to have a good time – we aren’t delivering bad news and we aren’t trying to solve problems for them. They are coming to us for a great time and all we have to do is help them. It’s the best job in the world.”
Other hotel Rich Listers included John Singleton, ranked No.145 with a $670million fortune.
“Singleton continues to back the pubs and restaurants game, his most recent investment being the $4 million construction of an art deco food venue on NSW’s Central Coast. Located in his Bonython Tower in Gosford, Bon Pavilion offers patrons a cafe, craft and whisky bar, and fine dining restaurant run by renowned chef Sean Connolly.”
Arthur Laundy came in at No.170 with $584million. Laundy owns more than 60 pubs and hotels across NSW. The Laundy Hotel Group continued to build its portfolio in 2018 with the purchase of the Bells Hotel on Woolloomooloo Wharf.
“The Laundy name has been associated with pubs for nearly 70 years, with Arthur snr purchasing the family’s first in 1945.“
And Jerry Schwartz at No.178 with $554million. Schwartz is a practising cosmetic surgeon and has built up a portfolio of hotels, resorts and pubs across Australia.
Gaming a profitable business for the rich
The liquor and gaming industry’s top entrant to the Rich List was James Packer at No.13 with a fortune of $4.94billion.
But the AFR speculates the days of Packer’s gambling interests are numbered. Packer has sold a 20% interest in Crown Resorts to long-time business partner Lawrence Ho for $1.8 billion. He maintains a 26% interest in the company building Sydney’s Barangaroo casino.
“However with the takeover activity keeping Crown shares at elevated levels, and with question marks over the future flow of high-rolling visitors from China, it may only be a matter of time before he moves on to what he deems more promising asset classes.”
Next up was Len Ainsworth and family, ranked at No.17 with a $4.01billion fortune.
Ainsworth sold most of his Ainsworth Game Technology to Austria’s NOVOMATIC for $473m in 2016, but remains executive chairman. The AFR notes he is “devoting more time to medical charities” these days.
“It was a medical mistake – a false cancer diagnosis – that led Ainsworth to give control of his first pokie-making giant, Aristocrat, to his family in 1994,” it reports. “However, to make sure they stayed involved, he pockets 80% of the proceeds of any shares they sell, until he dies.”
Bruce Mathieson came in at No.68 with $1.32billion. He owns 25% of the hotel and poker machine-owning giant ALH Group. The AFR speculates that Mathieson, who bought his first hotel in 1975, “is believed to be interested in taking full ownership of the group and listing it on the ASX”.
Greg Farrell and family came in at No.131 with $745million. The Farrell family own Mulaway Holdings, which has the exclusive right to operate poker machines in Tasmania.
Mulawa Holdings made $543 million revenue in 2017-18, and a $25 million post-tax profit, and has a monopoly over Tasmania’s pokies and Keno in 1993, which won’t expire until 2023. The family’s patriarch Greg Farrell snr built the state’s first casino at Wrest Point in 1968.
Casella family hits the rich list
Families were included in the Rich List for the first time this year, resulting in five new billionaire family entries including “the Casella wine barons”.
“The founders of these businesses have died, but the Rich List team decided that if their descendants still owned the business and were working together in it, these pools of wealth were too big to ignore,” the AFR reports.
John Casella and family entered the list at No.55 with a wealth of $1.57billion.
“The poor man’s bubbly has made the Casellas very rich. Yellow Tail, the sub-$10 sparkling made at the family’s Griffith-based winery business, has long been popular in the US – where Casella exports about 80% of its product – and the declining Australian dollar has only made it more so,” the AFR notes.
Following behind Casella was Sandy Oatley and family at No.87 with $1.09billion.
The family inherited its wealth from Bob Oatley, who established Rosemount Estate in 1969 and sold the business to Treasury Wine Estates in 2001 for $1.4billion. The family’s holdings still include the Robert Oatley Vineyards business including the Robert Oatley, Wild Oats and Four in Hand brands.