Charter Hall has acquired a $97-million stake in a major pub and hotel owner, the property investment manager has announced.
Charter Hall Group, in a joint venture with Charter Hall Retail REIT, has bought a 14.8 per cent stake in fellow listed company Hotel Property Investments Ltd (HPI).
The group said that the acquisition was consistent with its strategy to redeploy proceeds from recent shopping centre divestments to “convenience retail assets”.
The move means the property developer and funds manager will become the largest stakeholder in HPI.
HPI owns a portfolio of 57 pub and hotel properties, predominantly in Queensland, including Brisbane’s Regatta, The Wallaby Hotel at Mudgeeraba on the Gold Coast, the Leichhardt Hotel, Rockhampton; the Bribie Island Hotel and the Crown Hotel at Lutwyche in Brisbane’s inner north.
Elsewhere, the portfolio also includes suburban pubs Cornerstone Ale House in WA, the West End Hotel in Adelaide and Quest Griffin accommodation in New South Wales.
The majority are leased to operators the Queensland Venue Company and the Australian Venue Company.
HPI experienced sad news this year after the passing of managing director Don Smith, which prompted the company to divest.
It announced this month that it had struck a deal to sell four assets to its major tenant, Australian Venue Co, for $48.6 million.
At the time, acting chief executive Blair Strik said that despite challenging capital markets conditions, it had recorded strong pricing on its asset sales, due to “the attractive fundamentals of the sector” and was aiming to deploy capital into higher return investments.
According to its most recent half-year results, HPI reported a 9.5-year weighted average lease expiry (WALE), with an average option period of an additional 19.9 years and a profit of $9.5 million, up from a loss of $7.9 million in the corresponding period the year prior, as the hospitality industry bounces back.
As a result of the post-Covid rebound, owners have invested heavily in their assets, including plans to revamp Brisbane’s historic Victory Hotel lodged this year, and advertising exec John Singleton planning to double the size of the Elanora Hotel on the Gold Coast.
