General Gordon Hotel becomes Lantern’s latest Sydney sale
The listed Lantern Hotels Group has sold the General Gordon Hotel in Sydney’s southwest suburb of Sydenham to a Sydney publican backed by White & Partners for $18.1 million.
The deal continues a run of major pub sales in the city with vendors including Lantern and the Australian Pub Fund, backed by John Singleton, former Qantas chief Geoff Dixon and investment banker Mark Carnegie, looking to capitalise on the strong demand.
Prices have also jumped but industry experts noted that it was experienced publicans, including Merivale, Bondi Asset Management, Monarch Hotels and Iris Capital, that were actively buying pubs.
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Lantern has entered into arrangements to sell the freehold and business of the General Gordon Hotel at a price showing a 69% premium to the pub’s June 30 book value. Lantern has sold more than a dozen pubs in NSW and Queensland in recent times at massive price premiums, including the Five Dock Hotel in Sydney’s inner west and Commodore Hotel in North Sydney.
Publican Stan Pappas also bought The Waterworks Hotel in the southern Sydney suburb of Botany from Lantern for $17.3 million.
Ray White Hotels Australia’s Asia Pacific director Andrew Jolliffe brokered the sale of the General Gordon. He noted the demand for freehold hotels, citing big deals like Merivale owner Justin Hemmes buying the Tennyson Hotel for $37.05 million at auction.
White & Partners was a seller in that deal. It had picked up the Tennyson Hotel in Mascot for $25 million in 2015 in partnership with JDA Hotels, and then sold the site with development approval.
Ray White is also selling Lantern’s Crown Hotel in Sydney’s Surry Hills and John Singleton’s the Marlborough, in inner city Newtown, also in Sydney.
Jolliffe declined to comment on the latest purchaser, but says that existing and long-term hoteliers in Sydney are active. He says market sentiment for A-grade hotels in gateway eastern seaboard cities remains strong.
“Fundamentally, the majority of assets are underpinned by property, gaming inventory or both,” he says.
This article originally appeared on www.theaustralian.com.au/property.