Historic Tasmanian tavern opens doors to first sale in 40 years
Set in the Huon Valley, 45km southwest of Hobart, an 1840s-built tavern has hit the market for the first time in 40 years
While currently producing no profit and in need of restoration, buyers have multiple options on the table to turn Franklin Tavern into a notable business.
Importantly, it’s perfect timing for the freehold two-storey hotel’s sale with 2021-22 on track to be a record year for pub transactions, according to Real Capital Analytics.
Pacific head of analytics, Benjamin Martin-Henry believes pub sales are performing better than any other commercial sector including industrial.
In 2021, demand for Australia’s regional pubs rose above the 2017-2019 average of $226 million and investor acquisitions reached just under $1.2 billion, an astonishing figure when compared to the record full-year sales of $1.16 billion in both 2017 and 2019.
Realcommercial.com.au data also recorded that regional pub sales accounted for 35% of the national pub transaction volume in 2021, a sharp contrast to the sector’s 20% accounting in 2017-2019.
As well, pub sales declined by just 22% in 2020 while the hotel and retail sectors dropped 50% and 43% respectively.
With the pub sector relying to a great extent on in-person patronage during COVID, these figures emphasise its surprising “relative strength”, Mr Martin-Henry explained.
Tasmanian pub sector explodes
Having sold over 400 hotels and motels across Tasmania, including Franklin’s other pub and hotel, The Moorings at Lady Franklin, 25 years ago, Knight Frank’s Tasmanian hotel, motel & business sales consultant, John Blacklow, is well versed in this sector.
Mr Blacklow said while it was doing well even before COVID struck, thanks to budget prices compared to mainland counterparts, the industry was expected to perform even better thanks to an explosion of tourism and bike trails in particular.
The concurrent rise in residential real estate’s “bricks and mortar value” has also enhanced the already popular state, with Mr Blacklow explaining about 50% of Knight Frank’s hotel and pub buyers were older working couples, some with children, who were keen to retire from city life and had business experience.
Regardless of Franklin Tavern’s buyers, its proximity to The Moorings at Lady Franklin could result in a locational sales jar, Mr Blacklow said.
“With Franklin, having two hotels and pubs does make it very difficult as realistically, there should only be one in such a small town,” he said.
Tavern draws old and new interest
NAI Harcourts sales agent, Kingsley Wallman explained it was difficult to say who would buy Franklin Tavern but so far, the interest had come from both senior and younger Hobart residents.
With the owner prepared to provide on-site training to buyers, it was possible that those entirely new to the pub industry might buy the property.
Mr Wallman explained he’d received calls from older people who had restored and run pubs before while other younger couples with no experience were keen to simply move out of the city and enjoy a tree change.
As one of the few remaining taverns of its type in Tasmania, the property’s history has also been of great interest.
The property started life in 1846 as a hillside general store and tavern before its 1853 removal to its current position moments from the Huon River.
The now 82-year-old owner bought the property in 1979 and largely rebuilt it following a fire in 1990.
Restoration and renovation needed
With the property only trading part-time, offering no food but only $5 beverages, Mr Wallman admitted the tavern needed updating in every way if it was to make a profit.
“The owner’s only selling half a barrel of beer a week so the property doesn’t return any profit … (but) there is enormous scope to revitalise and grow the business,” he said.
He explained the property’s heritage listing meant it couldn’t be demolished and any major changes would have to be approved by the heritage council.
But the tavern certainly needed an internal staircase to the second storey with the area’s six bedrooms, two bathrooms, kitchen, living room and office not used for accommodation since the 1990 fire when the original staircase was burnt down and the owner chose not to replace it.
Mr Wallman explained the only access to the second storey was via an external fire escape which breaches safety regulations and is just one of many non-compliance building regulations that buyers will have to sift through.
However, buyers could subdivide and develop the 5,600sqm site with its “amenable and flexible” zoning allowing for multiple uses.
But Mr Wallman admitted that the tavern would need a determined buyer who was happy to get their hands dirty.
“It’s certainly not a sale for someone who thinks, ‘It’s a fantastic business and I’ll move in now and it’ll be a nice lifestyle’.”
The Franklin Tavern is a much-loved community asset he said.
“I think the buyer will be someone who really understands this, who’ll be part of the local community and wants to create a property bigger and better than it presently is.”
Franklin Tavern is for sale via expressions of interest with a price guide of over $1.5 million.