Harvest Hospitality launches $500m fund with eye on southeast Queensland expansion

The Wharf at Mooloolaba on the Sunshine Coast is up for sale for the first time in about 10 years.

Pub investor Harvest Hospitality has launched a open-ended fund aimed at retail and wholesale investors and is targeting to raise about $500m.

The three seed assets will include Brady’s Railway Hotel in Albury that Harvest Hospitality is buying for about $25m.

The acquisitive group, which at present owns 12 hotels in NSW and South Australia, is also looking to break into the lucrative southeast Queensland pub market, with sources confirming Harvest Hospitality was looking to acquire East Brisbane’s Shafston Hotel. Real estate agency HTL Property is believed to be handling that deal but has not commented on the transaction.

Harvest Hospitality was also potentially looking at The Wharf marina berths development in Mooloolaba that hit the market in August with an $80m price tag.

Harvest Hospitality chief executive Chris Cornforth would not be drawn on the potential southeast Queensland acquisitions including The Wharf, which operates 57 marina berths and has about 7000sq m of freehold land.

Billionaire Sydney Justin Hemmes. Picture: Richard Dobson

An expressions-of-interest campaign, which closed in October, also attracted the likes of billionaire Sydney publican Justin Hemmes, who owns $1.6bn worth of restaurants, pubs and bars, as well as Brisbane-based hospitality entrepreneur Adam Flaskas, who developed Brisbane’s booming Howard Smith Wharves and in partnership owns property around Sydney’s Manly Wharf.

 Other potential The Wharf buyers include Rob Comiskey, head of family-owned Queensland construction company Comiskey Group, which is involved in hotels and building.

Meanwhile, Mr Cornforth has attracted industry veterans to an investment committee advising his Harvest Hospitality Income Fund including Charlie Viola, founding partner of Viola Wealth; John White, former CEO of HPI; and the CEO of Grant Samuel, Damien Elias.

The Harvest Hospitality Income Fund is targeting $500m in assets under management over the medium term, with a target distribution yield of 6-8 per cent per annum (post fees) and an internal rate of return target of 10-12 per cent per annum after fees.

The fund aligns closely with recent pub trends such as hospitality spending up 72 per cent, banks returning to well-run ­venues, owner-operated and mid-scale pubs dominating activity, as well as the strong uplift in diversified-income and gaming-led ­assets.

Distributions will be paid quarterly, and the fund will offer capped withdrawal facilities and periodic liquidity events.

This marks the first investment offering from Harvest available to retail investors via its responsible entity.