Hotel investor Rod Salmon has sold a Sydney property and promptly bought another in deals worth about $100 million combined.
Salmon sold the Rydalmere Tavern in western Sydney to Andrew Lazarus’s Dalz Pty Ltd in October for about $65 million, industry sources said, which includes $17.24 million for the land.
Then last month he picked up the Chelsea Hotel at Chatswood for about $35 million.
The deals were handled by JLL hotels and hospitality managing director John Musca and senior vice-president Ben McDonald.
Patrick Gallagher was expecting to sell the Chelsea for $30 million in an international expressions-of-interest campaign managed by JLL.
The Rydalmere Tavern comes with 30 gaming machine entitlements, more than 3000sq m of space and a restaurant on the ground floor as well two commercial tenancies on the first floor of the 1461sq m Victoria Road site.
Current tenants Totally Workwear and Plus Fitness Gym will be staying on and bring in more than $400,000 in net rental revenue a year.
Salmon created the tavern after developing two adjacent commercial properties.
McDonald said the opportunity to buy an asset such as the Rydalmere Tavern was rare.
“Already a highly ranked gaming venue, the chance to acquire assets underpinned by growing underlying cashflows at this premium end of the market is rapidly diminishing as a result of widespread asset consolidation,” McDonald said.
“Combine that with more than $400,000 in net passive income from the commercial tenancies, the underlying development scope plus sought-after geographical location and we think the result speaks for itself.”
The Chelsea Hotel, opposite Chatswood Station, has 30 gaming machine entitlements, a bistro, bistro bar and public bar, and planning permission to add a beer garden deck.
It also has council approval to extend its trading hours until 4am.
Musca said that for investors hotels were a relatively stable investment despite economic uncertainty.
“The perpetual nature of hotel cashflows in key markets have shown their unrelenting ability to perform despite changing economic conditions,” Musca said.
“Long-term hotel investors continue to seek out assets offering value-accretive characteristics for existing portfolios, and we expect that to continue in 2023 despite a moving macro-economic environment.”
JLL Hotels has recorded $1.2 billion across 78 transactions for 2022 with more than $350 million in sales being finalised last week.
Endeavour Hotels recently purchased a coastal pub for $25 million while billionaire Sam Arnouat just bought ex-Wallaby player Bill Young's Wisemans Inn Hotel in an off-market deal.
