Garden State Hotel hits market and Zagame family could get $40m+
The Garden State Hotel at 95-101 Flinders Lane, Melbourne, has become a popular watering hole since it was created under the ownership of the Zagame family.
Melbourne’s wealthy Zagame family are selling popular Melbourne pub the Garden State Hotel, with expectations it should top $40m.
The Flinders Lane watering hole is being sold after almost 20 years in the prominent hotel family’s hands, and comes with a long-term lease to Paul Waterson’s Australian Venue Co, which is backed by Hong Kong-based PAG Asia Capital.
The prominent venue is currently leased through to 2042, after it was snapped up from Sand Hill Road’s Matt and Andy Mullins, and Tom Birch, as part of a $100m package deal that included the Espy Hotel and a suite of pubs across Prahran, Richmond and Cremorne in 2022.
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Around the corner from the Paris end of Collins St, the pub with a capacity of 800 people includes a popular beer garden, public bar and basement level cocktail bar dubbed the Rose Garden.
It also hosts a secondary venue within it, the Tippy-Tay Italian restaurant.
Records show the Zagame family, bought the property from former Rosati restaurant owner Piero Gesualdi for $5m in 2007.
The Garden State Hotel at 95-101 Flinders Lane, Melbourne
Headed by brothers Victor and Robert, the family-run business also owns a 97-room boutique hotel in Carlton named Zagame House, and have a series of much-loved and award-winning family venues across Melbourne, as well as hospitality interests interstate and internationally.
It is understood they are pursuing an active investment phase at present.
Industry sources have tipped their 95-101 Flinders Lane pub could surpass $40m and potentially reach closer to $45m.
McVay Real Estate and JLL are selling the property, which they have billed as an unrivalled opportunity.
Tippy-Tay’s head chef Dylan Evans, Ashly Hicks and sommelier Matt Skinner shortly after its opening. Picture: Jake Nowakowski.
“The scale, prime location and popularity of this venue makes this a rare opportunity for investors seeking a strong foothold in Melbourne’s world-class hospitality scene,” said Sam McVay.
“Given the strength of the location and the 17-year lease, it’s unlike anything I have ever seen. Usually in CBDs you get three or five year leases.”
He indicated that high-net-worth investors, as well as corporate groups from Melbourne, around Australia and across the world were expected to make offers for the pub.
JLL executive director Josh Rutman said the hotel was “Melbourne’s hospitality crown jewel” that blended a prime CBD address with a solid tenant and returns locked in for some 17 years.
Prior to the pandemic the Garden State Hotel attracted lengthy queues. Picture: Mark Stewart.
Prominent Melbourne commercial property pundit Mark Wizel said the property had hit the market at an opportune time, with the eastern end of the CBD currently one of its best performing for office attendance.
“The vacancy rate there is quite low compared to the other quadrants of the CBD,” Mr Wizel said.
“So it’s the right offering in the right spot.”
Expressions of interest for the hotel are expected to come from around the world, with offers due by 4pm November 27.
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