This week sees two landmark Melbourne pubs placed on the market, which sales agents expect will be highly sought after at a time of limited market supply and when demand from investors and developers is approaching fever-pitch, underwritten by the low cost of debt.
CBRE Hotels agents Scott Callow, Mark Wizel and Joseph Du Rieu have been appointed as the exclusive agents forthe historic Corkman Irish Pub (formerly the Carlton Inn) in Carlton and the British Crown Hotel in Collingwood. They expect strong interest from local, national and international buyers.
The Corkman Irish Pub is located at 154-160 Leicester Street Carlton, near bustling Lygon St and surrounded by Melbourne University campuses and student accommodation. It will be auctioned on October 30 on behalf of a family who has owned the asset for many years.
It will be offered as a freehold site, subject to a six month lease - with the ability for vacant possession in the short term. The buyers have the potential to take control of the business upon lease expiry, or look at development options (STCA). The property has a holding income of approximately $82,000 per year, sitting on 450sqm of land, with a mixed use zoning. The pub is expected to attract significant interest from developers, in light of how lucrative land in Carlton has become over the past decade.
CBRE Hotels expect to see strong domestic and international interest for both properties given their immediate proximity to the Melbourne CBD. Recently, the demand for prime sites within the CBD and city fringe has reached record levels, with land values growing from $14,000sqm to $28,000 per sqm. The Corkman is expected to achieve a price in the high $3 million range, the British Crown in the low $3 million.
Joseph Du Rieu said the Melbourne pub market is experiencing a changing dynamic, with many underperforming pubs in top locations achieving premium sale prices. He says this is due to the strength of the underlying land value, and high demand for quality sites in the CBD and city fringe.
Mr Du Rieu said; “We have seen many recent property sales along this trend, evident in the transaction of the Clarendon Hotel and Town Hall Hotel in South Melbourne, the Railway Hotel, West Melbourne, and the Duke of Kent Hotel in the north western corner of the CBD.”