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ASX-listed asset manager Moelis has settled on Byron Bay’s popular Beach Hotel after acquiring both the freehold and operating interests of the asset for $104 million.
The investment bank secured the hotel from the Liberman family-backed Impact Investment Group in November, outbidding three other shortlisted groups all with bids above the $100 million mark.
Moelis raised $67 million of the cost as part of an unlisted single-asset investment fund, with the remainder of the purchase debt-funded. Moelis said it is targeting annual returns of 13 per cent over the next five years.
The sale represents a significant uplift in value for Impact Investment Group, which acquired the asset for $70 million in 2017. The hotel freehold was listed by the Melbourne-based fund manager alongside its operators the van Haandel family in September 2019.
The deal is the first pub transaction in Australia to surpass $100 million and was managed by JLL’s John Musca, Tom Gibson and Tom Gleeson.
It is the second time the hotel changed hands since it was developed by filmmaker and producer John “Strop” Cornell for $9 million in the early ’90s.
After taking possession of the hotel and operating interests on Monday, Moelis flagged plans to “significantly overhaul” the venue.
The group controls ASX-listed Redcape which runs 32 gaming-focused venues along the east coast.
Moelis chief executive Dan Brady said that while no consideration has been given to the re-introduction of the pokies, the group is focused on delivering an offering that aligns with the community.
“[And] research to date indicates that gaming is not a preferred form of entertainment that interests the local community.”
Brady said Moelis will make operational improvements along with immediate repair work. Longer term plans include major design changes to the building for the first time in 13 years.
“The base building has not received the required level of investment over the years due to the split ownership structure,” Brady said.
“We are well capitalised to give the property this required future investment.”
Moelis has closed off its unlisted single-asset investment fund for the popular venue, which spans 4,585sq m overlooking Byron’s main beach.
