Investment group Moelis Australia has picked up two neighbouring late-night Oxford Street pubs for a combined price of $67 million, with the intentions to re-establish the “hospitality heartbeat” of Sydney’s Taylor Square.
Under Moelis Australia Hotel Management, the investment group has acquired the Kinselas Hotel, a multi-level art deco hotel in Taylor Square, Darlinghurst for $45 million and four-level venue the Courthouse Hotel for $22 million on the same block.
The Kinselas last changed hands in 2017 after Riversdale Hotel Holdings sold the property to the Kospetas family’s Universal Hotels for $23 million. Universal the bought it off John Singleton’s Australian Pub Fund in 2017.
The Courthouse Hotel, having been in the same hands for over 30 years, was purchased in late-November.
Both pubs will sit within the MA Taylor Square Fund backed by wholesale investors.
Moelis Australia Hotel Management chief executive Dan Brady said the consolidation of the adjoining properties at the northern and southern ends of Taylor Square would allow for the development of a unique hospitality precinct.
“Both venues in their own right are quality freehold going concern assets that will benefit from our platform expertise and the reopening of Sydney following the repealing of lockout laws in January.
“With capital investment we are excited to reposition the existing venues and unlock the future potential value of this prominent site,” Brady said.
Brady said the refurbishment along with staff engagement and a community advocacy-focused operational model would lead to attractive returns for investors and an enhanced experience for patrons and would contribute to the late-night economy as Sydney opened up following the pandemic.
“The consolidation of the properties into one large site presents unique development potential and the ability to create a hospitality precinct that aligns with the City of Sydney’s vision of revitalising Sydney’s nightlife and growing creative industries,” Brady said.
Early indications suggest additional levels and and entertainment experiences while the building’s historic facades will be retained.
Moelis’ acquired the iconic Byron Bay hotel late last year in a record-breaking deal worth about $104 million.
The Melbourne-based fund also controls the Redcape Hotel Group, one of the country’s biggest pub portfolios, after sealing a $677 million deal back in 2017.
CBRE Hotels director Paul Fraser said while restrictions are easing, pubs still face some pressure to adhere to Covid-19 regulations.
Fraser said as Covid-19 cases in Australia remain contained, the industry still faces a litmus test over the next 12 to 18 months but is expected to bounce back.
“Pubs must therefore be leaner, smarter and, more importantly, create a unique place for human connection in order to succeed in this environment,” Fraser said.