John Singleton’s Australian Pub Fund has taken a $7million haircut on the sale of The Elephant Hotel in Brisbane’s Fortitude Valley.
The historic four-level venue sold for just over $20 million to Sydney’s Tilley and Wills Hotels after last changing hands for around $27 million in mid-2013.
It’s the last remaining Queensland freehold asset owned by the Australian Pub Fund and Tilley and Willis Hotels’ first foray into the Brisbane pub market.
The Australian Financial Review reports the lower price paid by Tilley and Wills “was due to a decline in the pub’s trading income”.
The expansive, multi-level building offers four separate bars, a large outdoor beer garden and a gaming room with 42 machines. It occupies a large 1237sqm freehold site in a densely populated and highly frequented inner-city entertainment and business precinct.
Tilley and Wills Hotels currently operates five venues in Sydney including the Greenwood Hotel in North Sydney, the Clovelly Hotel in the Eastern Suburbs and Verandah Bar in the CBD.
The sale of The Elephant Hotel was handled by CBRE’s Paul Fraser and Jack Morrison in conjunction with JLL’s Tom Gleeson.
“The high-profile sales campaign generated over 60 enquiries and eight offers nationally, highlighting the appetite for large format going concern hotels with diverse income streams and obvious operational upside opportunities,” Fraser said.
“Demand strongly outstrips supply in Queensland’s South East corridor, which has led to heightened market tension and an overall tightening of cap rates. With cost of debt at an all-time low we don’t see this current environment changing in 2020.”
Gleeson added: “The incoming operators, Tilley and Wills Hotels, have an enviable track record of successfully re-inventing venues and are excited to bring their distinct style to the iconic Elephant Hotel and capitalise on the long-term prosperity of the Fortitude Valley precinct.”
