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LANTERN Hotels (ASX:LTN) has divested the last of its hotels with the sale of Surrey Hills Landmark Crown Hotel for $26.1 million to Peak Investments.
The transaction represented the final pub sale in the group's repositioning and divestment strategy. It was sold at a 51 per cent premium to the June 2016 book value of the hotel.
The sale is the culmination of an 18-month sell-down strategy of Lantern Hotels' 16 none-core and core pub assets, following a strategic review in 2015.
In line with the strategy, Lantern is expected to de-list from the stock exchange and return all proceeds of the sales to shareholders.
The Crown Hotel is an expansive four-level Victorian-style hotel prominently situated on the corner of Crown and Cleveland streets in Surry Hills.
It holds a 24-hour liquor licence with three hour gaming shutdown and 30 gaming machines.
CBRE Hotels and Ray White Hotels managed the sale campaign of the top-200 gaming pub.
"We've been privileged to have been heavily involved in Lantern Hotels' divestment program, with the Crown Hotel sale bringing to a close what has been a very successful outcome for the shareholders," says CBRE Hotels national director, Daniel Dragicevich.
Peak Investments entered the NSW pub market two years ago with the purchase of the Rose & Crown Hotel in Parramatta.
"This private funds management style of purchaser is becoming more and more prevalent in the current climate and provides genuine competition for the traditional pub families when quality assets are put to market," says Dragicevich.
The sale follows a record 12 months for the Sydney pub sector, with more than $550 million in deals finalised. The final three months of 2016 and beginning of 2017 in particular have seen unprecedented activity, with 13 top gaming hotels transacting.
Lantern Hotels began its divestment strategy in November 2015, and has since sold hotels including the Dolphin Hotel in Surrey Hills; Waterworks Hotel, Botany; Five Dock Hotel, Five Dock; Ambarvale Hotel, Ambarvale; Courthouse Hotel, Cairns.
Ray White Hotels managing director, Andrew Jolliffe, says there is an imbalance between the weight of well capitalised and well informed hospitality, and property groups chasing hard yield in an ever-diminishing pool of available A-grade assets.
Subsequently, prices for pubs such as Crown Hotel are selling for 50 per cent more than their book value.
Business News Australia
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