Byron Bay’s Beach Hotel revamp won’t include pokies
Investment bank Moelis has settled its purchase of the landmark Beach Hotel in Byron Bay, saying it could follow up the $104m acquisition with more pub buys.
The bank has closed off an unlisted fund for wealthy investors, for which it was seeking to raise $67m and had projected total annual returns of 13 per cent over the next five years.
The bullish outlook for beachside hotels has seen billionaires like Justin Hemmes and Chris Morris snap them up, and more are likely to change hands.
Moelis will first look to overhaul the famed pub on Byron’s Main Beach best known for once being owned by former Paul Hogan manager and sidekick John “Strop” Cornell.
The pub has had a series of high-profile owners since then, including race car driver Max Twigg and then Melbourne fund house Impact Investment.
Moelis swooped on the pub last year and then raised about $67 million from wealthy investors, with the remainder of the purchase debt-funded.
The bank’s Beach Hotel deal will allow an overhaul of the Byron pub as it effectively brings together the real estate and operating business for the first time in 13 years.
The pub will be run by Moelis Australia Hotel Management, which already runs the listed Redcape Hotel Group that comprises 32 mainly gaming-focused venues along the east coast.
The bank bought the pub after it was put on the block by Impact, which had the freehold, and the van Haandel family, which had the leasehold.
A process led by John Musca of JLL Hotels & Hospitality culminated in four short-listed bids valuing the “Beachie” at more than $100m.
Moelis Australia Hotel Management chief executive Dan Brady says there will be no pokies brought into the Byron pub but the new owners are planning to reconfigure parts of the property.
“We have a clear and exciting vision for the hotel — one that places the local community firmly at its core — and are committed to ensuring that the Beach Hotel continues to enrich the lives of those around it for many years to come,” he says.
Moelis wants to make operational improvements and undertake maintenance and repair work.
“The base building has not received the required level of investment over the years due to the split ownership structure,” Brady says.
“We are well capitalised to give the property this required investment.”
This article originally appeared on www.theaustralian.com.au/property.