Redcape Sells St George Hotel for $47m

ASX-listed Redcape Hotel Group has sold the St George Hotel in the western Sydney suburb of Belmore for $47.1 million.

Private hoteliers Michael Wiggins and Joanne Cassar, who recently sold the Oxford Hotel in Sydney’s Drummoyne for $41.75 million, picked up the Canterbury-based stalwart pub—which was built in 1893.

The sale price represents a 2.7 per cent premium for Redcape after an independent valuation earlier in the year.

The NSW pub sector saw $860 million worth of assets change hands across 66 transactions last financial year, according to brokers HTL Property.

Pubs in metropolitan Sydney accounted for more than half of all hotel sales by value, around $589 million.

Redcape, a $1 billion company backed by Moelis Australia which holds over 30 hotels across NSW and Queensland, is unlike other listed pub groups both owning and operating its establishments.

The group's chief executive Dan Brady said the funds from the sale would strengthen the company's balance sheet, with gearing reducing to 36 per cent.

“The Australian pub industry is highly fragmented and has been very active.

“The sale of the St George Hotel, Belmore is in line with our approach of actively managing the portfolio to maximise returns for our security holders.”

The funds from the sale will now provide Redcape with the capacity for additional value enhancing acquisitions with Brady “hoping to add more hotels” this financial year.

Over the 2018 financial year, Redcape made 63 per cent of its revenue from gaming, including TAB, Keno and poker machines, 20 per cent from bottle shops and 17 per cent on-premise on food and drinks.

The group has continued to remix its portfolio spending $21.6 million upgrading three Sydney venues —the Cabramatta Hotel, Leumeah Hotel and the Eastwood Hotel.

Redcape is also exploring the potential for alternative uses on freehold land it owns, targeting a different demographic of buyers through residential and aged care developments.

Hero image: Redcape chief executive Dan Brady. Source: Louise Kennerley.