Listed pub owner Redcape has added another hotel to its growing portfolio, snapping up a prominent tavern in Western Sydney for $30.5 million.
Owner and operator Redcape has acquired the O’Donoghues Hotel in Emu Plains, Penrith from FAL Group who had held the popular Irish pub for 23 years.
The 2,600sq m hotel, located on a 8,000sq m block directly opposite the Emu Plains train station.
The outer-Sydney transaction will now send a strong signal of confidence returning to the sector following the major disruptions caused by Covid-19.
JLL hotels and hospitality’s John Musca and Ben McDonald in conjunction with Mike Wheatley of Knight Frank negotiated the sale.
The agents said the listing was contested by a number of local and prominent hoteliers, along with commercial property developers vying to secure the large format hotel and 5,500sq m of land holding future development potential.
“We are currently seeing varying boardroom strategies and capital deployment options employed and executed by hotel groups on significant expansion trails in a post Covid-19 world,” McDonald said.
“These strategies continue to put downward pressure on capitalisation rates which we see continuing in 2021.”
Redcape, led by chief executive Dan Brady, has remained active in the resurgent pub market, targeting additional east-coast assets at the tail end of last year.
The hotel group picked up the Gladstone Hotel in Sydney's inner west along with the Little Bottler bottleshop and Local Liquor Superstore in Dulwich Hill for $38 million.
It now has 28, of its 33, venues in NSW as well as 22 bottle shops and three accommodation venues.
Brady said the group’s the acquisition of O’Donoghues would compliment its growing portfolio of suburb community hotels in high growth areas.
“O’Donoghues is a true community hub and we are thrilled to have the hotel join our portfolio.
“We will invest some capital to enhance the venue and strengthen its offering in a targeted way that makes the local community proud,” Brady said.
Penrith is one of the fastest-growing areas in Sydney, with Redcape joining Laundy Hotels and Oscars Hotels in staking a recent claim in the Penrith market.
The Laundys picked up the Log Cabin Hotel in early 2020, and are also building a new tavern in the Jordan Springs residential development.
In mid-2020, Oscars Hotels purchased the Tattersalls Hotel in the middle of the Penrith CBD for approximately $28 million which was followed by the acquisition of the Bidwill Hotel for $35 million in December.
