Sam Arnaout’s Iris Capital has snapped up three hotels in Newcastle and Lake Macquarie for circa $30 million in the area’s largest ever pub portfolio transaction.
The off-market sale was negotiated on behalf of Newcastle owners Campbell and Clare Rogers through CBRE Hotels’ Ben McDonald and Moore & Moore Real Estate’s Dean Moore.
The deal involves prominent watering holes the Sydney Junction Hotel in Hamilton, the waterfront Gunyah Hotel in Belmont and the Argenton Hotel in Glendale.
“The acquisition provides Iris Capital with immediate scale and a significant hotel footprint in an area where they have already made a significant investment through their $700 million EastEnd mall redevelopment,” Mr McDonald said.
“With 55 poker machine entitlements, a strong weekly cashflow and a large, combined site area of 7,263sqm, the portfolio presented an attractive opportunity to invest in a high growth market, with future upside.”
This could include increasing the number of poker machines entitlements throughout the portfolio in addition to a range of development opportunities.
At the Gunyah Hotel, an architectural scheme has been drafted to increase the size of the gaming room, construct a ground floor beer garden/alfresco dining area and increase the first-floor function area to include a new balcony offering uninterrupted water views.
An opportunity also exists to transform the underutilised first floor of the Sydney Junction Hotel into a function space with kitchen facilities.
Mr McDonald also noted that the portfolio offered significant depreciation benefits following recent refurbishment works.
This included a complete, architecturally-designed refurbishment of the Argenton Hotel, which was re-opened in September this year.