Iris Capital Snaps Up Chinatown Hotel Lease

Iris Capital has sold the leasehold interest in the 888 Hotel in Sydney’s Chinatown district for circa $7.5 million to Gallagher Hotel Management.

CBRE Hotels negotiated the deal, which represents the third transaction between the two parties – two of NSW’s largest hotel groups.

The sale to Gallagher also included the property’s valuable CBD Hotel Licence as well as the 30 attached poker machines.

CBRE Hotels Pub Director Dan Dragicevich said: “The pub market is buoyant at present and this extends to leasehold venues which provide a more affordable entry point than freeholds and generally higher returns for experienced publicans.""What has held back investment in this segment has historically been debt liquidity however this has changed with banks drawn to those same attributes that have underpinned interest from hotel operators.”

Mr Dragicevich noted that leasehold venues were also attractive for larger groups such as GHM as they provided an improved blended IRR to a portfolio.

Sam Arnaout, CEO of Iris Capital, added: “This sale is another example of our overall corporate strategy to take advantage of both buy and sell opportunities in an increasingly liquid market. Although we are long term hoteliers and view the sector as attractive and stable it is only prudent to not be locked into a certain mindset.”